1885
1
2 MANITOBA CLEAN ENVIRONMENT COMMISSION
3
4 VERBATIM TRANSCRIPT
5 Volume 8
6
7 Including List of Participants
8
9
10
11 Hearing
12
13 Wuskwatim Generation and Transmission Project
14
15 Presiding:
16 Gerard Lecuyer, Chair
17 Kathi Kinew
18 Harvey Nepinak
19 Robert Mayer
20 Terry Sargeant
21
22 Tuesday, March 16, 2004
23 Radisson Hotel
24 288 Portage Avenue
25 Winnipeg, Manitoba
1886
1
2 LIST OF PARTICIPANTS
3
4 Clean Environment Commission:
5 Gerard Lecuyer Chairman
6 Terry Sargeant Member
7 Harvey Nepinak Member
8 Kathi Avery Kinew Member
9 Doug Abra Counsel to Commission
10 Rory Grewar Staff
11 CEC Advisors:
12 Mel Falk
13 Dave Farlinger
14 Jack Scriven
15 Jim Sandison
16 Jean McClellan
17 Brent McLean
18 Kyla Gibson
19
20 Nisichawayasihk Cree Nation:
21 Chief Jerry Primrose
22 Elvis Thomas
23 Campbell MacInnes
24 Valerie Matthews Lemieux
25
1887
1 LIST OF PARTICIPANTS
2
3 Manitoba Conservation:
4 Larry Strachan
5
6 Manitoba Hydro/NCN:
7 Ed Wojczynski
8 Ken Adams
9 Carolyn Wray
10 Ron Mazur
11 Lloyd Kuczek
12 Cam Osler
13 Stuart Davies
14 David Hicks
15 George Rempel
16 David Cormie
17 Alex Fleming
18 Marvin Shaffer
19
20 Community Association of South Indian Lake:
21 Leslie Dysart
22 Merrell-Ann Phare
23
24 CAC/MSOS:
25 Byron Williams
1888
1 LIST OF PARTICIPANTS
2
3 Canadian Nature Federation/Manitoba Wildlands:
4 Eamon Murphy
5 Gaile Whelan Enns
6 Brian Hart
7
8 Time to Respect Earth's Ecosystems/Resource Conservation Man:
9 Peter Miller
10 Ralph Torrie
11
12 Trapline 18:
13 Greg McIvor
14
15 Displaced Residents of South Indian Lake:
16 Dennis Troniak
17
18 Environment Approvals (Manitoba Justice):
19 Stu Pierce
20
21 Presenters:
22 Billy Moore - Private
23 Bill Turner - MIPUG
24 Caroline Bruyere - Private
25 Grand Chief Margaret Swan - Southern Chiefs
1889
1 LIST OF PARTICIPANTS
2
3 Presenters:
4 Peter Kulchyski
5 Patrick McCully
6 Timothy Rudnicki
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
1890
1
2
3 INDEX OF EXHIBITS
4
5 Number Page
6
7 CNF 1000: Correspondence received by
8 the CEC from CNF regarding process 1920
9 CNF 1001: Letter of presenters and
10 background presentation area
11 from CNF dated March 2, 2004 1920
12 CNF 1002: Letter of presenters and
13 background presentation area
14 from CNF received March 11, 2004 1921
15 CNF-1003: Overhead slide presentation,
16 report of the World Commission
17 on Dams, remarks and its relevance
18 in the Manitoba context 2060
19 CNF-1004: Mr. Rudnicki's
20 PowerPoint slide presentation 2177
21 CNF-1005: Mr. Rudnicki's typed
22 submission re Proposed Wuskwatim
23 Generation & Transmission Project 2178
24 MH/NCN 1011: Letter, May 25, 2001 2157
25
1891
1
2 INDEX OF UNDERTAKINGS
3
4 UNDERTAKING NO. PAGE
5
6 MH/NCN 42: Produce letter from Law
7 Society 2163
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
1892
1 TUESDAY, MARCH 16, 2004
2 Upon commencing at 9:36 a.m
3
4 THE CHAIRMAN: Mrs. Gaile Whelan Enns, will
5 you please take the front table. And as we begin,
6 we would like for you to respond to the memo of March
7 12th, which you got from Hydro I believe.
8 MS. WHELAN ENNS: Good morning. There is a
9 memo to the Secretary of the Clean Environment
10 Commission as of the end of the day yesterday in
11 response to both scheduling questions and the
12 Manitoba Hydro memo.
13 THE CHAIRMAN: Yes. Would you tell us what
14 that is about.
15 MS. WHELAN ENNS: Sure. Thank you. For the
16 public in the room and for other participants in the
17 room, we had a combination of challenges in respect
18 to scheduling presenters, most of whom are
19 volunteers. Okay. I'm going to -- just because that
20 maybe needs to be said the second time. Most of the
21 presenters or witnesses, if one chooses to use that
22 word, that we have approached to participate in these
23 hearings are volunteers. I was asked last night what
24 the proportion was. I think there are at this point
25 only three that are contractors and then remunerated
1893
1 to be here.
2 The arrangement for today for Manitoba
3 Wildlands CNF presenters was made with the CEC based
4 on the previous schedule where the days in week three
5 were identified for public participants'
6 presentations.
7 Our arrangements then were made in terms of
8 being able to book flights, book time in people's
9 schedules, particularly those who have agreed to do
10 this as a volunteer. Our arrangements were then made
11 on that basis.
12 We ran into some challenges with three
13 presenters, on-site presenters as we term them. One
14 of them was called out of the country. One of them
15 became ill last week, was actually in Manitoba and
16 became ill and is in B.C. right now. And the third,
17 the archeologist was a function of discussions that
18 had to wait until they could be undertaken in person.
19 We had identified prior to that the hope, if
20 you will, and the need to have some independent
21 advice, content, information for the CEC in regards
22 to archeology. And I had been attempting to find the
23 participant and witness and had struck out a few
24 times. That generally applies both in relation to
25 our resources to participate in these hearings and
1894
1 the number of approaches that it takes to in fact put
2 together a group of presenters for the hearings.
3 It's been going on since November though I think we
4 would have all wished a bit more time for other
5 things in November.
6 I'm going to check with the Chair, if I may,
7 to see if I am answering the questions appropriately
8 in terms of what is requested this morning.
9 THE CHAIRMAN: Perhaps not altogether. In
10 particular, I guess you had given some of that
11 explanation but perhaps not all of what I might have
12 wanted to hear in regards to the memo that you got
13 from Hydro, NCN on March 12th in regards to the
14 lateness of putting out your list of expert
15 witnesses. And as well, I would like to hear from
16 you how Manitoba Wildlands intends to use the day
17 here to make its presentation.
18 MS. ENNS: Thank you. A little bit more
19 background, and thank you again to the Chair. The
20 public participants for this review and then the CEC
21 stages of it and these hearings first applied for
22 funding based on their perception and understanding
23 of the stages of technical work and public review
24 involved in June two years ago. Then there was a
25 notice in November of that year to add to alter,
1895
1 change, increase, if you will, the request.
2 And we have all I think been doing our level
3 best as proponents, commissioners, staff and public
4 participants since last July in respect to the fairly
5 dramatic changes in what has been required and
6 expected of us.
7 So when we got down to the third week in
8 January of this year, our organization was a
9 situation where two-thirds, a little bit more than
10 two-thirds probably of the participant funding was
11 gone. At that point, I had to in fact make decisions
12 in terms of how to make sure we were still able to in
13 fact participate in the hearings. And a variety of
14 things that were expected procedurally in February
15 did simply not have the expected resources or
16 attention.
17 That was a tough set of decisions. But we
18 would have if we, for instance, put the, by my
19 estimate, 100 to 200 hours of technical time to
20 certain of the expectations in February, then we
21 would not have been able to participate in the
22 hearings. So there were some very real challenges
23 again due to the changes overall in the process that
24 we've all been doing our best in. That included then
25 being able to close with the various individuals,
1896
1 scientists, experts, environmentalists that we had
2 been talking to in regards to participating here and
3 presenting here.
4 That's the reality, if you will, and I think
5 that it applies to everybody who has been involved
6 that we have all been working to, in fact, fulfil the
7 expectations to the best of our ability.
8 Our capacity and our organization has been
9 affected in particular by the need for legal
10 services. We are in a situation now where we are
11 overall but not specifically in terms of
12 participants' expectations to be here, we're well
13 beyond what the participants' funding was in the
14 first place. So to put all that in one simple
15 sentence, we've been doing our best and wanted to
16 make sure that we were actually still able to
17 participate and be here for the hearings.
18 The presenters who are here today or and are
19 going to be on the phone this afternoon are going to
20 in fact provide information for the Panel, for the
21 Commission and for the audience in the room in areas
22 that we have been concerned about in relation to the
23 information provided to date.
24 They are not here to provide analysis in terms
25 of transcript, EIS review and all of the many steps
1897
1 and stages of technical work and information that
2 we've all been through. Again, in the non-profit
3 sector when the majority of presenters are
4 volunteers, they have not been pursuing and reading
5 and studying the way that most of us have been
6 attempting to.
7 So for instance, Dr. Kulchyski from the
8 University of Manitoba is here to put some context on
9 a community basis for the Commission in regards to
10 Aboriginal rights and community concerns. It's his
11 speciality certainly both in the role he's in at the
12 University of Manitoba now and before at Trent
13 University.
14 Mr. Soprovich is very knowledgeable regarding
15 the west side of the province, the regions that these
16 joint projects are intended for. He is a forest
17 ecologist and knows this landscape and knows the
18 species and is going to be quite specific in terms of
19 some of our concerns where the EIS contents has not
20 been explicit or specific enough. In particular, he
21 will be addressing the concerns that we have
22 attempted to address since the first round of review
23 comments in July last year on the approach to
24 modelling and arriving then at conclusions for the
25 environmental statements and impact statements and
1898
1 the plan for transmission corridors.
2 Mr. Rudnicki is, as you all know, from
3 Minnesota. He is a lawyer and he is knowledgeable in
4 respect to alternative energy, wind, policy, both
5 public policy and the regulatory framework in respect
6 to energy in Minnesota. He is also knowledgeable on
7 a more not day-to-day basis but ongoing basis in
8 respect to discussions, if you will, debates and the
9 political context for Minnesota's objectives for
10 home-grown energy.
11 Mr. McCully is both of the International
12 Rivers Network in terms of being campaign director
13 for them and of the World Commission on Dams. The
14 proponents on day one of these hearings were making
15 specific references. I think it happened probably
16 two or three times now where the references to the
17 World Commission on Dams are in the transcript.
18 What we were doing in this discussion in terms
19 of hoping for some of Mr. McCully's time on the
20 ground here in Winnipeg was seeking to bring an
21 international perspective into the discussion in
22 respect to dams, decommissioning, climate change in
23 dams, affects on rivers and a whole variety of areas
24 in terms of international policy.
25 We have three presenters by phone this
1899
1 afternoon. Dr. Bayne's, from the University of
2 Alberta, speciality is a combination of, and he may
3 correct me because he's the scientist and I do not
4 have their biographies beside me at the moment, but
5 he is in fact an expert in terms of what sometimes is
6 referred to as linear disturbance or forest
7 fragmentation. In short form, impacts on the forest
8 itself by corridors, roads, trails and so on. And
9 that includes transmission corridors. His area of
10 knowledge in terms of species is birds, and birds in
11 the boreal and migratory birds.
12 What we were attempting to do on these topics
13 was secure Dr. Keith Hobson to speak to the Panel and
14 to provide information and evidence. Dr. Hobson has
15 spoken to Clean Environment Commission hearings in
16 Manitoba previously. And he works for the Canadian
17 Wildlife Service and is therefore a public servant.
18 Our advice was to in fact ask Dr. Bayne to
19 participate. Dr. Bayne is a former student and now
20 colleague of Dr. Hobson who is, on an international
21 basis, recognized as being expert in these areas.
22 And in particular in both mixed wood and boreal
23 forest regions.
24 Senators Anderson and Kubly, who have a
25 limited amount of time this afternoon on the phone
1900
1 because they are in a legislative session and I don't
2 know whether it's a wind-down or a wind-up of
3 committee meetings, have been asked to briefly and
4 specifically speak to you. In terms of Senator
5 Kubly, who is a rural Minnesota Senator, to talk
6 about the rural economy and alternative energy,
7 specifically wind.
8 Senator Anderson who Chairs the committee in
9 the Minnesota Legislature who deals with a variety of
10 things in terms of environmental licensing and
11 standards for alternative energy and also the
12 economic development decisions in respect to
13 alternative energy and wind will have some remarks in
14 those areas.
15 THE CHAIRMAN: Mr. Mayer.
16 MR. MAYER: Ms. Whelan Enns, you mentioned
17 that of your witnesses, most of them are volunteers
18 and only three are contractors. Which three are the
19 contractors?
20 MS. WHELAN ENNS: I was making a reference to
21 the complete set. All of the presenters are
22 witnesses whom we have registered to date. Today,
23 the contractors are Mr. Rudnicki and Mr. Soprovich.
24 MR. MAYER: And those people are to be
25 qualified I take it as experts in their field?
1901
1 MS. WHELAN ENNS: Yes, though I have not and
2 the people assisting me in terms of securing
3 participants and presenters for these hearings have
4 not taken a legal approach in terms of qualifying
5 experts.
6 MR. MAYER: Well, my concern is is that
7 several months, well not several months ago, some
8 time ago, there was a concern raised about the fact
9 that no substantive evidence had been filed on behalf
10 of Canadian Nature Federation. And in light of your
11 presentation to the Participant Assistance Committee,
12 we had expected to see some of that.
13 I can understand how it would be very
14 difficult to get volunteers to actually prepare
15 reports. But were either of the two contractors that
16 you are calling today requested to provide evidence,
17 written evidence, written reports that would give the
18 Commission and the proponents some indication of what
19 they might be saying?
20 MS. WHELAN ENNS: I think that's quite a fair
21 question. In time for these deadlines in February,
22 no. The ability to respond and have work product
23 thought out, contracted and completed in time for
24 certain of these deadlines in February was not there.
25 And that has to do with both, for instance, my
1902
1 capacity personally as managing our participation,
2 their schedules and other responsibilities we found
3 ourselves working on in January.
4 MR. MAYER: Did you request either of the two
5 contractors who we are expected to hear from today to
6 prepare such reports?
7 MS. WHELAN ENNS: I think you mean by the
8 deadline in February?
9 MR. MAYER: No, I don't mean by the deadline.
10 Did you at any time ask them to prepare reports?
11 MS. WHELAN ENNS: I'm going to try again and
12 do my best to understand your questions. Close to
13 the time of the substantive evidence deadline, all we
14 were able to do is post a memo indicating what we
15 were aiming to include, okay.
16 MR. MAYER: Ms. Whelan Enns, perhaps I should
17 ask the question again because you appear not to
18 understand it.
19 MS. WHELAN ENNS: Sure.
20 MR. MAYER: Did you, at any time, request
21 either of the two contractors who we are expected to
22 hear from today to prepare substantive reports?
23 MS. WHELAN ENNS: It wasn't feasible, no.
24 These presentations that are prepared for today
25 literally were being worked on until ten or eleven
1903
1 o'clock at night last night. Even when a contractor
2 is providing services specifically to a non-profit
3 organization, they are almost, without exception,
4 providing those services at a different rate
5 schedule, a different time schedule where -- how do
6 you describe the fact that in most cases, rates are
7 significantly decreased? It's sort of like being
8 half volunteer and half on contract. It's a reality
9 in terms of our efforts to provide information.
10 MR. MAYER: Ms. Whelan Enns, I understand what
11 you're saying. However, the last I heard, a Time to
12 Respect Earth's Ecosystems was an NGO. CAC/MSOS are
13 NGOs. Both of them have experts. Both of them have
14 provided reports significantly in advance.
15 That aside, what I understand you're saying is
16 that neither of the two people who we will hear from
17 today who are contractors have been requested to
18 provide any such report. So this is not their fault
19 I take it?
20 MS. WHELAN ENNS: It was a judgment on my part
21 in terms of what was needed, what we were able to do
22 at what point in time. It was not a deliberate
23 avoidance of any expectation in these deadlines in
24 February. I have done my best along the way to make
25 sure that the CEC knew what restrictions and
1904
1 limitations we had. Among other things, I was
2 involved in trying to secure additional funding so as
3 to be able to be here.
4 If I may respond to your references to the
5 Consumers Association of Canada and the Seniors
6 Society who are joint funded public participants and
7 Resource Conservation of Manitoba and Time to Respect
8 Earth's Ecosystems who are joint public participants
9 here. In their situation, they had very specific
10 singular and direct topic requirements and
11 expectations in terms of what they have been working
12 on technically. They also both had significantly
13 more funding than Manitoba Wildlands Canadian Nature
14 Federation.
15 MR. SARGEANT: Which group had significantly
16 more?
17 MS. WHELAN ENNS: I believe, and again I do
18 not have the figures in front of me, okay, so I'm not
19 going to try to quote figures, but I believe that the
20 TREE/RCM funding, which is mostly of course as Mr.
21 Mayer is pointing out, gone to the consultant who has
22 been doing their technical work, is a greater amount
23 than we received. And the same is true for the
24 Public Interest Law Centre who represents the Society
25 of Seniors and the Canadian Association of Consumers.
1905
1 The main thing that I was trying to say is
2 that in our situation, again, without knowing when we
3 were filing a submission to participate and request
4 funding in the middle of 2002, in our situation, we
5 in fact found ourselves in a very, well, a
6 dramatically different sequence of expectations and
7 technical work where we in fact have the
8 environmental impact statement itself. And we are
9 the only public participant specifically funded in
10 terms of the entire environmental impact statement.
11 We were of course working on both the EIS, the
12 JNFAAT. And I think you'll find that both of your
13 example organizations' primary responsibility is
14 JNFAAT only.
15 So what I'm trying to make a couple of
16 comments on is that the expectations and
17 responsibilities and technical work for ourselves was
18 quite a bit wider and included more elements.
19 MR. MAYER: Thank you. I have no further
20 questions, Mr. Chair.
21 THE CHAIRMAN: Other members of the Panel?
22 Any comments from --
23 MS. WHELAN ENNS: I'm sorry, if I could
24 provide an example of one of the consequences of
25 having the EIS, the JNFAAT and both the parts of the
1906
1 combined project to deal with. In our request, we
2 fell short about $20,000 from what our initial budget
3 was in the submission. That has caused us to seek
4 other ways to provide information in respect to wind
5 energy because the request of us was to work on wind
6 energy. That goes then directly to Senators Kubly
7 and Anderson, Mr. Rudnicki's presentation, Robert
8 Hornung's presentation, some of who are volunteers.
9 THE CHAIRMAN: Ms. Whalen Enns, I asked you a
10 while ago how do you intend to proceed today? Do you
11 intend to make a presentation yourself and then
12 you're going to be calling upon the individuals that
13 you have mentioned? Is that how you intend to
14 proceed?
15 MS. WHELAN ENNS: I have no presentation
16 myself this morning and I believe that there is a
17 question in terms of cross-examination and then the
18 sequence and use of time. So what we would like to
19 do, and this is sort of one shift in the sequence of
20 presenters from what I provided to the Secretary of
21 the CEC yesterday afternoon, we would like to start
22 with Dr. Kulchyski, we would like to then move to Mr.
23 Rudnicki and to Mr. McCully and then to Mr.
24 Soprovich.
25 THE CHAIRMAN: Those are the four that we'll
1907
1 be talking to this morning?
2 MS. WHELAN ENNS: Yes, with the aim in terms
3 of it fitting in the morning. And my request or
4 suggestion in terms of questions for these presenters
5 would be to, in the interest of use of time and a bit
6 of continuity, hear the four of them and then have
7 questions. But I'm completely open to what the Chair
8 and the Commission prefers.
9 THE CHAIRMAN: All right. Can all four of
10 these speakers be up front and then make their
11 presentation and then be questioned afterwards? You
12 also have to appreciate the fact that neither the
13 Panel here nor anybody else has had the opportunity
14 to see any of their presentations or know exactly
15 what they intend to present. This may present
16 difficulties in the questioning or cross-examination
17 afterwards. We may have questions in that regard as
18 well.
19 MS. WHELAN ENNS: I appreciate that those are
20 concerns. In writing a short memo yesterday
21 afternoon on these subjects for the Commission, our
22 aim was to respectfully ask that these presenters be
23 given the flexibility and the opportunity that a
24 public participant, as in a general public
25 participant, would receive in these hearings. And
1908
1 you are completely right about the documentation and
2 the presentation material. We were receiving it
3 yesterday and have been doing production last night
4 and this morning.
5 MR. SARGEANT: But you're not a public
6 participant like the average person off the street.
7 You've been funded. I mean there's a higher bar for
8 the funded participants.
9 MS. WHELAN ENNS: That's correct. And I am
10 not disagreeing with what you're saying, Mr.
11 Sargeant. What I'm basically trying to describe is
12 what we have been doing to our capacity, to our
13 resources in an effort to fulfil those standards.
14 And I am perhaps begging the question then of whether
15 there should be a situation where a public
16 participant would actually have more success
17 presenting than presenters that we have approached in
18 situations, in circumstances we've been in.
19 So I wasn't trying to say they are the same, I
20 was just basically, again as the memo indicates,
21 hoping that that flexibility will be able to be
22 there.
23 THE CHAIRMAN: As we've told you before in a
24 memo that I myself signed, we do recognize that we
25 want to hear from as many people that have interests
1909
1 in the issues before us. And in that regard, we have
2 always tried to make that as much as possible happen
3 and allowed some leeway in that regard, and we are
4 prepared to do so again. But on the other hand, we
5 also reminded you that there's a limit to this
6 elasticity of flexibility. And you had to be ready
7 to accept, that if you wanted to test it to the
8 limit, that you could be challenged in that regard.
9 And that may still happen.
10 I think at this point in time, we'll begin the
11 process and see how it evolves. And I don't know if
12 the proponents have any comments to make before we
13 begin or if there is any problems in that regard.
14 Mr. Bedford?
15 MR. BEDFORD: Mr. Chair, if I could have a few
16 minutes to talk to Ms. Matthews Lemieux, I think we
17 will have one or two comments we would like to make
18 to you.
19 THE CHAIRMAN: Mr. Byron Williams.
20 MR. WILLIAMS: Yes. Thank you, Mr. Chairman.
21 Good morning, members of the Panel. Just very
22 briefly on instructions from my clients. I just want
23 to make their position clear for this morning and if
24 it will be of any help to the Panel.
25 My clients, as did their legal counsel, had
1910
1 some concerns with the process that was undertaken
2 and the lack of pre-filed information. That being
3 said, like this Commission, my clients look forward
4 to hearing the presenters presented by Manitoba
5 Wildlands or CNF.
6 And I guess to protect my client's interest,
7 to the extent that there is expert evidence that they
8 consider to be relevant and material, if that occurs
9 and they feel that that needs to be questioned, they
10 will make a judgment call at that point in time in
11 terms of whether they need an adjournment to test
12 that evidence or whether they need it at that point
13 in time. And that will be the suggestion I make to
14 the Panel in that sense that certainly let's proceed
15 and hear their witnesses, recognize that there's
16 been, from our perspective, a bit of a disadvantage
17 but it may not be a real disadvantage. We'll see as
18 the day progresses.
19 So I just wanted to put my client's comments
20 on the record in that regard, Mr. Chairman.
21 THE CHAIRMAN: Thank you, Mr. Williams. You
22 do have wise suggestions as usual. Mr. Bedford.
23 MR. BEDFORD: Mr. Chair, Commissioners, we
24 wrote the letter last Friday for two reasons. One
25 was to bring to your attention a concern that, quite
1911
1 frankly, we believe is the Clean Environment
2 Commission's responsibility to address and we believe
3 you have been addressing it this morning. The second
4 reason was to give advance notice of the position
5 that we intended to take this morning. And I can add
6 something further to that but you know, having read
7 the letter, that we are not going to object to the
8 Canadian Nature Federation Manitoba Wildlands being
9 allowed at least to bring forward these witnesses.
10 You have already noted what we of course and
11 all in the room ought to have been aware of, the
12 Canadian Nature Federation Manitoba Wildlands has
13 been a registered and funded participant in these
14 proceedings since last July. And with all due
15 respect to Ms. Gaile Whelan Enns, there is no reason
16 in our view why, six months ago, witnesses for the
17 price of long-distance telephone calls could not have
18 been identified; why, for the price of posted stamps,
19 the relevant portions of the material that we have
20 filed could not have been sent to these individuals
21 for their review. And there is no reason why any of
22 these witnesses could not at least have filed a
23 report of five pages, 10 pages or 25 pages setting
24 out the substance of what they intend to tell us
25 today.
1912
1 These are all simple things that can be done.
2 Funding is not an excuse for not having done them.
3 Complaints about time constraints is not an excuse
4 for not doing simple things.
5 We're here today, as you've correctly
6 observed, without any pre-filed material. We have an
7 abject failure to provide the names of any of these
8 witnesses within the deadline that you stipulated.
9 Our concern is that the Canadian Nature
10 Federation Manitoba Wildlands has completely failed
11 to grasp that the foundation of a fair process, be it
12 before the Clean Environment Commission of the
13 Province of Manitoba, the Public Utilities Board of
14 the Province of Manitoba or Her Majesty's Court of
15 Queen's Bench begins with simple respect for
16 procedures and directions of the Tribunal before
17 which one is appearing.
18 We don't think it's acceptable to substitute
19 for respect for procedures and directions pious
20 hypocrisy. And we find it astonishing that the
21 Canadian Nature Federation Manitoba Wildlands which
22 has been masquerading for months as the champion of
23 the public interest has so flagrantly betrayed the
24 public interest.
25 There is a simple reason why participants, at
1913
1 least those who care about the public interest and
2 fair process, were required by you, the
3 commissioners, to file a month ago substantive
4 hearing documentation. Questioning expert testimony
5 is hard work. For it to be meaningful to those who
6 wish to question, one needs to understand in advance
7 what the expert's opinion is, what the expert intends
8 to say.
9 Those who question, as I do and Ms. Matthews
10 Lemieux does, on behalf of a client, need time to
11 review with the client in advance what it is that the
12 expert will be saying and indeed to review with those
13 experts that our clients have retained for the
14 purpose of providing advice.
15 Now all those who have been here for two weeks
16 now can appreciate how much richer discussion is, how
17 much more useful expert testimony is and how much
18 better informed Commissioners are when those who
19 question have worked hard and have been able to
20 prepare. And conversely, those of us who have been
21 here for the last two weeks can all appreciate how
22 much less useful questioning is when there has been
23 little or no preparation.
24 Now, in the absence of any written material
25 whatsoever having been filed by any of the witnesses
1914
1 that the Canadian Nature Federation, Manitoba
2 Wildlands intends to call today, there can be no
3 meaningful preparation by us. That defeats your
4 public process. That hinders a full sharing of
5 information and a richer discussion that you've been
6 able to benefit from with the previous testimony and
7 the previous questioning that's taken place here.
8 That's the concern. And I reiterate, we have
9 observed that you have been addressing that concern
10 this morning which we do think it was your
11 responsibility to address.
12 Now, before the letter was written on March
13 12, I sat down and I reread, several times, Mr.
14 Lecuyer's letter of February 17. And although he
15 signed it, I assumed, I think quite comfortably, that
16 that letter was written on behalf of the Clean
17 Environment Commission and its content endorsed by
18 all five Commissioners.
19 We well recognize that you have a process here
20 which you wish and which should encourage public
21 participation, open discussion and the sharing of
22 information as you have written. And I well
23 recognize that a too rigid adherence to rules of
24 procedure, a too rigid adherence to laws of evidence
25 and in fact simply having too many lawyers in the
1915
1 room can intimidate and discourage public
2 participation.
3 And accordingly, it was my advice shared by
4 Ms. Matthews Lemieux to her client when faced with
5 what we're now faced with today, that we recommend
6 that these witnesses be allowed to be called. But to
7 the extent that any of them are going to express
8 opinions, give expert testimony, we request that it
9 is in your interests as well as ours that we all
10 first understand what their areas of expertise are
11 and whether in fact the areas of expertise upon which
12 they wish to present a topic are relevant to your
13 tasks in reviewing the Wuskwatim projects.
14 We will do our best to ask questions if
15 testimony goes forward and if we determine that we
16 should be asking questions and if what is said is
17 relevant. However, to the extent that we are unable
18 to ask meaningful questions because we have been
19 unable to effectively prepare, we ask that the
20 witnesses be brought back at the convenience of the
21 Commission and of us. And where there is no
22 cooperation in bringing them back, we will ask that
23 their evidence be disregarded and stricken from the
24 record. Thank you.
25 THE CHAIRMAN: Thank you, Mr. Bedford. I will
1916
1 now turn to Ms. Gaile Whelan Enns and ask whether
2 Manitoba Wildlands Canadian Nature Federation is
3 prepared to accept to call back the witnesses at a
4 time that is mutually agreeable to all parties
5 sometime in early April probably to respond to
6 questions. Those who make their presentation in
7 person would have to come back to respond in person.
8 Those who make their presentation by phone would have
9 to be available to respond to questions by phone.
10 Would that be agreeable, if so requested by the
11 members here?
12 MS. WHELAN ENNS: We would do our utmost to be
13 able to do that. I can't speak for the individuals
14 who are going to present this morning. I can't ask
15 them here. We also will of course be out of
16 participant funding. But we would certainly aim to
17 do that.
18 If I may comment upon something I may have
19 heard incorrectly or assumed wrongly, I was aware of
20 the possibility of questions for presenters or
21 cross-examination, as it's termed, happening over the
22 phone. I was not aware procedurally of the
23 distinction in terms of in present, then questions in
24 present. Presentation by phone, questions by phone.
25 But we would definitely do our best to accommodate.
1917
1 And I appreciate the relevance of what you're
2 asking and doing procedurally this morning. I would
3 like to know if I could make a couple of comments to
4 the proponent?
5 THE CHAIRMAN: Briefly, yes.
6 MS. WHELAN ENNS: Okay. So that we have a
7 record in the transcript this morning, our legal
8 counsel is not able to be here. Our funding
9 basically provides us with the time on site last week
10 and then time on site by our legal counsel during
11 closing arguments in April. So that remains the
12 situation which means that I am basically doing my
13 level best then to answer questions procedurally and
14 talk to our legal counsel by phone. So again, just
15 to make sure that the record shows that that is the
16 situation.
17 Six months ago is a very good retrospective in
18 respect to presenters and identifying witnesses
19 because before we knew there were going to be two
20 sequences or two kinds of interrogatories for this
21 review, we were well into beginning to identify our
22 witnesses.
23 Again, to emphasize that the majority of our
24 witnesses are not contractors, they are volunteers
25 and it takes talking to advisors, finding individuals
1918
1 then who know or already work with the individuals
2 that we have been approaching. It takes finding a
3 contractor to pick that work up to be able to
4 identify the witnesses.
5 I have not been aiming to sound like we are
6 making excuses but rather to clearly identify the
7 situation and I think it's probably perhaps relevant
8 for future reviews for the public participant program
9 overall and for decisions in terms of ability to
10 participate and best way to qualify. I think the
11 provisional order in respect to our funding was
12 explicit and clear and we have been doing our best to
13 fulfil it. I do not deny where we haven't managed
14 that.
15 I would like to thank the Commission for their
16 consideration this morning. I believe that the
17 presenters who are here have definitely something to
18 contribute and we will do our utmost in terms of,
19 well, the written material obviously and the
20 opportunity to question.
21 I would take it then, Mr. Chair, that we are
22 not going to have questions of presenters this
23 morning or are we going to do both?
24 THE CHAIRMAN: That is not necessarily so.
25 There may be some questions this morning but I think
1919
1 from what I've just told you before, we reserve the
2 right to ask further or additional questions and the
3 proponents want to have that right as well. That
4 doesn't imply that there won't be any questions
5 today.
6 MS. WHELAN ENNS: It doesn't imply that there
7 will be follow-up questions either, that we will hear
8 about that determination.
9 THE CHAIRMAN: I think it's something we want
10 to leave open and that we want to make sure you
11 understand that this is a possibility. And if we ask
12 that one of the expert witnesses be back to respond
13 to questions and is not available, then we would have
14 to consider striking his presentation, his comments
15 from the record. So let me --
16 MS. WHELAN ENNS: I understand that and I
17 appreciate it.
18 THE CHAIRMAN: Okay. Now, we understand some
19 of the challenges that you have to face. One of the
20 factors being that there are two portions to the
21 hearing I suppose adds to that but in the same vein,
22 we also want to be fair to all the participants.
23 So that having been put on the record, maybe
24 we can begin. But seeing the time, maybe we will
25 take a short break. And we're responsible, that
1920
1 was unavoidable because of an emergency this morning,
2 we had to start a bit late. If we take ten minutes
3 now and then we can go on straight till noon.
4 MS. WHELAN ENNS: Thank you.
5 MR. GREWAR: Mr. Chairman, there's just a
6 number of exhibits that should be entered just for
7 consistency. The first would be correspondence
8 received by the CEC from the Canadian Nature
9 Federation of yesterday regarding process, and that
10 will be Exhibit CNF 1000. In addition to which
11 because they've been referred to, we should perhaps
12 indicate two documents that were received after the
13 commencement of the hearing which were letters of
14 presenters and background presentation area from
15 Canadian Nature Federation. One would be dated March
16 2, 2004 and that would be CNF 1001. And one received
17 on March 11th would be CNF 1002. So those are the
18 documents that should be on the record.
19
20 (EXHIBIT CNF 1000: Correspondence received by
21 the CEC from CNF regarding process)
22
23 (EXHIBIT CNF 1001: Letter of presenters and
24 background presentation area from CNF dated
25 March 2, 2004)
1921
1 (EXHIBIT CNF 1002: Letter of presenters and
2 background presentation area from CNF received
3 March 11, 2004)
4
5 THE CHAIRMAN: Thank you, Mr. Grewar. We will
6 just take a break for ten minutes.
7
8 (PROCEEDINGS ADJOURNED AT 10:23 A.M. and
9 RECONVENED AT 10:36 A.M.)
10
11 THE CHAIRMAN: Ladies and gentlemen, we are
12 ready to proceed. I gather you're Mr. Kulchyski?
13 MR. KULCHYSKI: That's correct.
14 THE CHAIRMAN: I'll let you proceed then.
15 MR. GREWAR: Sorry, this is Rudnicki?
16 THE CHAIRMAN: Kulchyski.
17 MR. GREWAR: Okay. We've got the
18 presentations out of order then. You have no
19 PowerPoint presentation?
20 MR. KULCHYSKI: No.
21 MR. GREWAR: I will have to swear you in.
22 Could you state your name for the record, please.
23 MR. KULCHYSKI: Sure. Peter Kulchyski.
24 MR. GREWAR: Mr. Kulchyski, are you aware that
25 it is an offence in Manitoba to knowingly mislead
1922
1 this Commission?
2 MR. KULCHYSKI: Now I am, yes.
3 MR. GREWAR: Do you promise to tell only the
4 truth in proceedings before this Commission?
5 MR. KULCHYSKI: Absolutely.
6 MR. GREWAR: Thank you, sir.
7 MR. KULCHYSKI: Thanks.
8
9 (PETER KULCHYSKI: SWORN)
10
11 MR. KULCHYSKI: Well, I'm currently head of
12 the Native Studies Department of the University of
13 Manitoba. Kathi asked me to say, or Ms. Kinew, that
14 I was actually born in Bissett, Manitoba. I attended
15 high school at Cranberry Portage at Frontier
16 Collegiate Institute, the government-run residential
17 high school. I did my undergraduate degree at the
18 University of Winnipeg in Politics before completing
19 my Masters and PhD at York University. So I'm a dyed
20 in the wool Manitoban who is very happy and proud to
21 have come back here. And it's an honour for me to
22 address you.
23 What I want to do in the brief amount of time
24 that I've got, it is a thoroughly -- an oral
25 presentation. I am currently writing up an analysis
1923
1 for the Canadian Centre for Policy Alternatives about
2 the Wuskwatim Statement of Understanding between
3 Manitoba Hydro and the Nisichawayasihk Cree Nation.
4 I will make that available to the Commission. It
5 will be ready within a few days.
6 Also I just haven't had time. I am a
7 volunteer and I've been very busy with the teaching
8 term but I will write up my notes for you from today
9 and attach any other documents. Although I'm
10 speaking to you at a very general level, I'm not
11 going to be looking at the technicalities of any
12 agreements for you so I believe you'll be able to
13 follow what I have to say. Also I'm quite prepared
14 to come back and deal with any further questions you
15 have apart from any you might have today, if you want
16 me to, subject to both of our schedules.
17 What I'm going to speak to you about today
18 comes into four categories. The first is
19 communities. I think it's important I say a few
20 words about the distinctive nature of Aboriginal
21 communities because that's really the basis of
22 Aboriginal and Treaty rights. Secondly, I'll talk
23 about Treaties. Thirdly, I want to talk about
24 contemporary agreements. And lastly, I want to talk
25 a little bit about rivers and legacies. And I
1924
1 believe I can do this within the 20 minutes or half
2 an hour that I've got. So let me begin with
3 communities first of all.
4 I think in general, I believe Canadians
5 misunderstand some of the things that distinguish
6 aboriginal communities from mainstream communities.
7 And I want to get a few of those out on the table
8 because I think before we get anywhere, it's
9 important to understand this. And so there's three
10 points that I want to make.
11 First of all, Aboriginal cultures are hunting
12 cultures. They are not agricultural or they don't
13 come from agricultural societies, they come from
14 hunting societies. And there's profound and basic
15 differences between hunting cultures and other kinds
16 of cultures.
17 Most of the rest of multicultural Canada,
18 whether you're an immigrant from Vietnam or England
19 or Poland or where ever, you came either from an
20 agricultural society or an industrial society with a
21 whole different set and kind of values and
22 understandings.
23 One of the distinctivenesses of Aboriginal
24 peoples is that the values, structures, the nature of
25 the culture itself owes itself to the fact that it's
1925
1 a hunting culture. And I should say Manitoba is one
2 of the last homelands in the world for hunting
3 cultures. So when we talk about Aboriginal cultures,
4 it's important to remember that they are not simply
5 another link in the chain of multicultures. We can't
6 say Polish, Ukranian, Vietnamese, Portuguese, Cree.
7 In fact, there's a qualitative difference between
8 Cree and all of those other cultures because of the
9 nature of it as a hunting culture.
10 Secondly, there's also a distinction between
11 Cree and all of those others that I listed because of
12 the fact that Cree were prior occupants of Manitoba.
13 That fact means that my parents are Polish and
14 Ukranian and I speak neither Polish and Ukranian. I
15 walk around with my hand on my forehead like this and
16 lament the fact that I don't know much about Ukranian
17 culture and I try and pretend it's a grand tragedy
18 but actually it's just a personally sad event.
19 If the Cree language disappears from Northern
20 Manitoba, the chances of the Cree language surviving
21 in the world become greatly reduced. Portuguese
22 language will continue to be practised in Portugal.
23 Polish language and culture will continue to be
24 practised in Poland. Vietnamese language and culture
25 will continue to be practised in Vietnam.
1926
1 It's a sad fact that Aboriginal cultures have
2 Canada as their homeland. Well, the sad fact and the
3 great fact. It means that we have the obligation,
4 the responsibility and the great privilege of being
5 the homelands of those cultures. And to the extent
6 that we're keeping those cultures alive and vital,
7 we're making a contribution to the world's cultural
8 diversity in a way that none of the other
9 multicultural elements of Canada can quite claim.
10 Last thing I want to say about Aboriginal
11 communities is the extended nature of occupation of
12 those communities. Families in Aboriginal
13 communities can rest assured that their descendants
14 will continue to be in those communities for
15 generations to follow. All right. So if you're a
16 Neckoway from Nelson House, you have a very good
17 chance that there will be Neckoways in Nelson House
18 200 years from now. And you have to be concerned
19 about that.
20 I'm a Kulchyski from Bissett. When my older
21 brother passes away, there will be no more Kulchyskis
22 in Bissett. And that's a fact of life for most of us
23 for the reality of most non-Aboriginal Canadians.
24 It's not a fact of life for most Aboriginal
25 Canadians. There is out migration from Aboriginal
1927
1 communities but there is also a long-term
2 generational commitment family by family to every one
3 of those communities that distinguishes them from the
4 rest of the rural communities in Manitoba.
5 So in my view, the fact that they are hunting
6 cultures, that they are prior occupants and that they
7 contemplate an extended occupation of particular
8 areas of land, their homelands, into the distant
9 future are things that mark Aboriginal communities
10 out from non-Aboriginal communities and are one of
11 the reasons why we have, not only the reason, but one
12 of the main reasons why I think it's right that we
13 have Treaty rights and we have Aboriginal rights.
14 Treaties have been with us in Manitoba for a
15 long time and of course Treaty 5 was signed initially
16 in Northern Manitoba in 1875 with various adhesions
17 through into the 20th century. So I am on to my
18 second topic now on treaties.
19 It's only in the last 15 years that the
20 Supreme Court of Canada has really started to look at
21 what are the canons of interpretation? How do we
22 interpret treaties? What do treaties mean? And in
23 two particular cases that I want to mention, the
24 Sioui case and the Marshall case which I wanted to
25 just talk about at a very general level.
1928
1 The courts have said treaties are a lot more
2 valuable than they have been treated through much of
3 the first 100 years of the history. The Sioui
4 decision of 1990 written by then Justice Dickson said
5 that treaties need to be interpreted in a liberal and
6 generous manner. And I'm paraphrasing. They said
7 you don't just read the literal words of the
8 treaties. You have to pay attention to what both
9 parties were understanding when they came to the
10 table.
11 The Marshall decision of 1999 emphasized that
12 the oral history of Aboriginal peoples and other
13 extrinsic evidence should play a role in interpreting
14 the treaty. And it reaffirmed the nature of the
15 Sioui decision.
16 Both of those two decisions would tell us that
17 we shouldn't look at the treaties the way we have for
18 much of the last 100 years, which I would say has
19 been based on the literal rendering of the treaties
20 and I would characterize as a narrow and
21 mean-spirited interpretation of the treaties.
22 The courts have said we need to take a liberal
23 and generous interpretation of treaties. The
24 treaties are now constitutionally protected since
25 1982. Section 35 says existing Aboriginal and treaty
1929
1 rights are hereby recognized and affirmed.
2 I would say at a bare minimum, if you want to
3 then say well what would a liberal and generous
4 interpretation of the treaties look like? What would
5 a liberal and generous interpretation of the treaties
6 look like? What would the understanding of both
7 parties be? There are two critical aspects.
8 Certainly it was the understanding of the
9 Federal Government that they were negotiating
10 something like access to Aboriginal lands. They
11 worded that as a land surrender. But what, in my
12 view, they were actually getting was access to
13 Aboriginal lands.
14 What they were promising, what they certainly
15 strongly promised in every treaty orally during
16 treaty negotiations was that the Aboriginal people
17 could maintain their way of life. And what the
18 treaty itself indicated was that Aboriginal people
19 would continue to have hunting, fishing and trapping
20 right on so-called unoccupied Crown lands. And it's
21 that that I want to devote my attention to here,
22 unoccupied Crown lands which is in a sense some of
23 what we're talking about.
24 It's my view that if we were to actually have
25 a liberal and generous interpretation of the Treaty,
1930
1 we would recognize that Aboriginal peoples have an
2 ongoing interest, a legal right and an ongoing
3 interest in all unoccupied Crown lands in Manitoba
4 and specifically in Northern Manitoba.
5 If we were to be liberal and generous, we
6 would say it's our duty to ensure that enough
7 unoccupied Crown lands remain intact in a way that
8 would continue to support the hunting economy and way
9 of life of Aboriginal peoples. And at a minimum to
10 me, not really being liberal and generous, but at a
11 bare minimum, that would mean understanding
12 Aboriginal people as co-owners and co-managers of
13 unoccupied Crown lands. Of consulting with them
14 before we have a plan for a project and we're this
15 far down the road. But actually talking to people
16 before we make plans and say what are your plans,
17 what lands do you need? How viable and sustainable
18 is the hunting economy of your community? These are
19 questions we should have asked a long time ago.
20 We should be asking now if we want to take a
21 liberal and generous interpretation of the treaties
22 the way the Supreme Court of Canada has said. And
23 it's unfortunate to me that we don't. All we seem is
24 to come to this point where a project is proposed and
25 we're well down the road before we can engage in
1931
1 serious consultation.
2 Thirdly, I want to turn then to agreements.
3 It was certainly not the intention of the signers of
4 treaties that they would be in a worse off position,
5 particularly the Aboriginal signatories of treaties,
6 that that would put them in a worse off position than
7 people who hadn't signed treaties.
8 But the history of Manitoba in the last 20, 30
9 years has actually -- that's been the case. The
10 Treaty nations of Northern Manitoba who got into
11 agreements with us 100 years ago have effectively
12 been punished for signing those treaties because
13 they've gotten worse deals around hydroelectric
14 development proposals than First Nations have in
15 Northern Manitoba.
16 So the James Bay in Northern Quebec agreement
17 compares favourably and is much better in many
18 respects than the Northern Flood Agreement which was
19 even seen so generous that some of the parties felt
20 they needed to buy out some of the provisions.
21 The current Peace of the Braves in Quebec
22 structurally is a much better agreement than the
23 Statement of Understanding between Manitoba Hydro and
24 the Nisichawayasihk Cree Nation which I've had the
25 opportunity to look at, the October document.
1932
1 Primarily on a structural basis, we can argue
2 about the amounts of money and about the sizes of the
3 project, but structurally the Wuskwatim agreement,
4 the Statement of Understanding says Wuskwatim -- the
5 Nisichawayasihk Nation will gain funds as a result of
6 assuming some risk. They will be lent money and
7 therefore they will assume risk for a project and
8 therefore they will gain an equity position in the
9 project.
10 Structurally on the other hand, the James Bay
11 Cree are being offered funding, $70 million a year
12 for 50 years. And they actually, in the
13 negotiations, talked about having an equity position.
14 The Cree rejected that. They are getting paid
15 effectively because these developments are taking
16 place on their lands.
17 Today, that deal, the Peace of the Braves, was
18 negotiated after the Cree had a modern Treaty. So we
19 can't even say the situation is different in terms of
20 treaties. There's a treaty now in Northern Quebec,
21 the James Bay in Northern Quebec agreement. There's
22 a Treaty in Northern Manitoba, Treaty 5.
23 Why are we offering the Nisichawayasihk Cree
24 Nation so much less? Why are we having them have to
25 assume risk in order to take an equity position in a
1933
1 project? And in Quebec, they are saying you get
2 money, you have no risk.
3 I'm not faulting the leaders of
4 Nisichawayasihk Cree Nation. I think they do the
5 best they can to get the best deal they can. But I'm
6 saying we, the public, Manitoba Hydro and the
7 Manitoba Government, aren't being fair to them.
8 We're not offering them anything like the deals that
9 are being offered in other jurisdictions.
10 It's my view in fact that Manitoba was founded
11 on an Aboriginal fact, Louis Riel, concerns of the
12 Metis and concerns of First Nations. It's my view as
13 a proud Manitoba citizen that we should be leading
14 the way in having Treaties respected and in
15 developing modern arrangements with First Nations and
16 with treaty nations that stand the scrutiny of other
17 jurisdictions within Canada.
18 In fact, I believe this agreement, if it goes
19 ahead, puts us behind other jurisdictions, puts us in
20 last place. And is something that, as a Manitoban, I
21 would hang my head over. And I would say we're not
22 giving our First Nations and our treaty nations
23 anything like the kind of respect they are getting in
24 other jurisdictions. And actually that makes me
25 ashamed.
1934
1 Finally I want to turn to rivers and legacies
2 and I'm not -- I have no expertise on environmental
3 issues. I do have some expertise on treaty rights
4 and on northern communities and northern cultures.
5 But I travel on rivers. I've travelled on the Nelson
6 River with bottled river. I've travelled on the
7 Winnipeg River with bottled water. It's hard to
8 survive as a hunter in the world today when you have
9 to take water out with you wherever you go.
10 Rivers are the life blood of the hunting
11 economies. They are the transportation routes. They
12 connect people together. They are really how people
13 survive. The current poster for the Department of
14 Native Studies -- I will attach it to documents that
15 I send you -- has an image by an Aboriginal artist
16 called River People. I think that's quite true
17 actually. If you look at the traditional maps of
18 Canada and you look at many of those communities
19 today, they are situated along rivers.
20 And regardless of the various debates about
21 the projects, I know that before the first wave of
22 Hydro development in Northern Manitoba, you could
23 drink the water on the Nelson River. And I know that
24 now, practically speaking, most people don't. I know
25 that now with this project that's proposed and future
1935
1 projects that's proposed, we're striking another
2 stake in the hearts of hunters.
3 And think about it. We don't hesitate to say
4 that farming families are the basis of rural
5 communities. And we invest in farming families
6 because we want those communities. Right. The
7 Federal Government is announcing $500 million for the
8 beef industry because it's been hard hit. Have you
9 ever seen an announcement of that magnitude
10 supporting hunting families in northern Canada? Has
11 anybody done anything conscientiously to try and say
12 maybe hunters are the basis of a sustainable future
13 in Northern Manitoba? In fact, the hunting economy
14 doesn't even register with economists. They see
15 hunters as unemployed people. They don't see any GDP
16 coming out of hunters.
17 If there's one thing that I would want to
18 leave you with is that hunting is not an outdated way
19 of life. Hunters can actually live a wealthier way
20 of life. And I'm among now the privileged members of
21 society. It wasn't always that way and I can
22 appreciate my privilege. But actually, many hunters
23 live a better way of life than me because the hunting
24 way of life allows them more time. It allows them to
25 spend time with their families. It allows them to
1936
1 invent very rich cultures. It allows them to be
2 their own bosses, to live a bush life. That's a good
3 way of life.
4 What we're underestimating in all of this is a
5 quality of life that we have systematically
6 denigrated for a few hundred years that we're only
7 now becoming to be in a position that we can actually
8 appreciate. If we say the only economic development
9 that can take place in northern Manitoba is Hydro
10 development and mining development and lumber
11 development, we're missing the very basis of what
12 sustained Northern Manitoba communities actually for
13 centuries.
14 And I'll leave you with one image of hunting
15 communities. Hunting communities around the world
16 have been around for at least as long as modern human
17 beings have, according to archeologists. Let's say
18 60,000 years is the current estimate. Agricultural
19 societies have been around for about 8,000 to 10,000
20 years. Industrial society wouldn't even make it on
21 that chart. It would something like a few hundred
22 years.
23 Hunting communities have proven themselves to
24 be the most sustainable social organization that
25 human beings have ever invented. No other way of
1937
1 life has sustained itself for that long. And I'm not
2 talking about a past way of life, I'm talking about
3 now a contemporary way of life. Hunters hunt with
4 modern technologies and enjoy some of the modern
5 benefits of life but they are still living.
6 One of the last homelands of the world of
7 hunters is Northern Manitoba as a part of Northern
8 Canada. If we don't begin to start appreciating
9 that, I think we continue a legacy that will leave
10 another generation of children hating Manitoba Hydro,
11 hating Manitoba Hydro. We'll leave another
12 generation of children who have small wage work and
13 whose families are largely unemployed and are
14 meaningfully unemployed because they can't even
15 sustain themselves by going out on the land and
16 living that rich way of life.
17 The Berger Inquiry of the mid 1970s said they
18 didn't say no to the proposed pipeline development,
19 they said delay it. I was born in Northern Manitoba.
20 My father is buried under the earth of Northern
21 Manitoba. I've travelled around the world and came
22 back to Manitoba because I want to be here. My
23 daughter was born here. I love this province and I
24 love the north.
25 I urge you, as a Commission, to use whatever
1938
1 powers you have to delay or stop this project
2 because I think we're doing the wrong thing with
3 Northern Manitoba and I think we are doing the wrong
4 thing with the hunters who deserve a much better
5 break in our economy and in our lives. And that's,
6 in a nutshell, what I have to say to you. Thank you.
7 THE CHAIRMAN: Thank you. Mr. Sargeant.
8 MR. SARGEANT: Dr. Kulchyski, just on your
9 almost very last point about the Berger Commission,
10 you noted that Berger suggested delaying the
11 pipeline. And in the last two, three, five years
12 we've seen great development on those pipelines as
13 the Aboriginal communities in the NWT, particularly
14 in the McKenzie Valley, have concluded their treaties
15 and now feel in a position to take advantage of the
16 economic development.
17 How does that differ from the Nisichawayasihk
18 Cree Nation now moving to take advantage of economic
19 development in their region much as the Deh-Cho and
20 other NWT Bands are moving in that direction?
21 MR. KULCHYSKI: Well, I should say the two
22 regions that are in favour of development and that
23 have completed their modern treaties are the Sahtu
24 and the Gwichin. The Deh-Cho region which is a third
25 region to the south.
1939
1 MR. SARGEANT: I just picked that out. It's
2 just one of the three or four in the valley.
3 MR. KULCHYSKI: Since I'm actually intimately
4 familiar with the Deh-Cho and with all of those
5 regions, I'll say this. The Deh-Cho, from my
6 discussions with the leadership, they continue to be
7 opposed to pipeline development and they haven't
8 concluded a modern Treaty agreement. I know the
9 Sahtu very well. I haven't worked that closely with
10 the Gwichin. There's a fair bit of controversy
11 within the Sahtu community.
12 But I would say between the early 1970s when
13 that project was first proposed and now, and it's
14 again there's a lot of talk of it, we haven't seen
15 construction happening, certainly those communities
16 have had a long time. Some of them have finished
17 Treaty negotiations and some of them are now prepared
18 to be involved. And you know, I wish them the best
19 in that.
20 I don't believe that the nature of pipeline
21 construction is as economically devastating as the
22 nature of Hydro development in terms of its impact on
23 the environment. Because when you affect a whole
24 river system, you affect all of what comes off of
25 that. I would suspect even the Sahtu and Gwichin
1940
1 regions would have a great deal of difficulty if
2 someone wanted to try and do Hydro development on the
3 Deh-Cho River, on the McKenzie River itself.
4 So the difference is partly the nature of the
5 projects, partly that they've had agreements that
6 have given them significant equity to start off with.
7 They can decide to buy in or not buy into the project
8 without borrowing money but having their own money.
9 And they've had enough money to sort of train
10 themselves and prepare themselves from their land
11 claims.
12 We've disrespected the treaty 5 land claim to
13 such an extent that most of the First Nations, you
14 know, they haven't been sitting on $75 million,
15 hiring their own lawyers, looking at the broad
16 situation, spending 10 years sort of thinking about
17 do they want to be involved or not. For the most
18 part, they've been funded by Indian Affairs. They've
19 been underfunded. There are serious and aggravated
20 problems in the communities. I don't think they've
21 been given the time to prepare.
22 And it's partly because the modern treaties,
23 the Sahtu Treaty and the Gwichin Treaty as more
24 recent agreements, have more money attached to them
25 and are given more respect.
1941
1 Treaty 5 has given the Nisichawayasihk Cree
2 Nation members $5.00 a year.
3 MR. SARGEANT: I don't want to speak for
4 Councillor Thomas but we've heard from him over the
5 last two or three weeks or couple of weeks that we've
6 been sitting here that his community has really put a
7 lot of thought and a lot of consideration into this
8 over the past number of years really since I suppose
9 since the early, mid-nineties when they started to
10 negotiate the NFA implementation agreement. And not
11 long after that was put in place, they moved into
12 this.
13 So at least I don't get the impression that
14 it's been a hasty decision and an uninformed decision
15 on their part.
16 MR. KULCHYSKI: You know, I'll leave that to
17 members of the community including the Chief to speak
18 to. I hear different things obviously from different
19 community members. The one thing I'd say is that to
20 me, the real comparison is between what's going on in
21 Northern Quebec and what's going on in Manitoba where
22 you have two treaties, one an earlier Treaty and one
23 a modern Treaty and effectively, by the nature of
24 this agreement, we're punishing people from having
25 solemnly signed an agreement more than 100 years ago.
1942
1 Apart from the dollar amounts and other things
2 that's structural disparity, I don't think anybody
3 looking at the situation objectively can't say we're
4 doing much worse. We're not offering the same kind
5 of deal here in Manitoba than is offered to the Crees
6 of Quebec. And I don't see any logical reason why
7 that's the case.
8 MR. SARGEANT: We heard yesterday from
9 Councillor Thomas that they did consider the Quebec
10 situation and they opted for this one.
11 MR. KULCHYSKI: Well, when people only have
12 one offer on the table --
13 MR. SARGEANT: He indicated there was more
14 than one offer. Again, I don't want to speak for him
15 but this is what I heard from him yesterday.
16 MR. KULCHYSKI: I mean it certainly would seem
17 to me to be incomprehensible if you were offered
18 anything like what the Cree of Quebec were getting
19 which is simply money without strings attached to it
20 and without assuming risk. You know, I can't believe
21 that the leaders of Nisichawayasihk wouldn't have
22 taken that rather than a debt that gives them risk
23 and gives them equity. They could have just used the
24 money to buy if they want equity which is what the
25 Cree in Quebec could consider and at the moment,
1943
1 generally speaking, they ruled that out.
2 I should say one of the other problems with
3 equity, and I haven't had the time to do a detailed
4 analysis for you of the agreement, but I will send
5 you one, I believe this is the reason that the Cree
6 in Quebec didn't use the money they got to buy into
7 the project is because when they do have equity, they
8 are tied into it. And that ties our hands up when it
9 comes to being critics over the environment damage.
10 Once you start assuming equity, you have to hope that
11 the project is going to succeed and, therefore, you
12 start having objective interest in, you know, not
13 being as rigorous in making sure that the
14 environmental impacts are mitigated and all of those
15 sorts of things. You start needing to make sure the
16 project makes profits so your community doesn't go in
17 debt.
18 So apart from its value in dollar terms
19 structurally, the equity position means that the
20 community becomes tied into the success of the
21 project. And if strict environmental standards, for
22 example, are limiting the profit margin, then you're
23 in an objective conflict of interest. The Cree in
24 Quebec are in no such conflict of interest.
25 MR. SARGEANT: How about the Gwichin and Sahtu
1944
1 and the McKenzie Valley pipeline? Aren't they going
2 to be equity partners?
3 MR. KULCHYSKI: They are proposing to be
4 equity partners and I would say they will be in a
5 similar kind of conflict of interest. But again, I
6 will emphasize, the Hydro development won't have the
7 same kind of environmental impact. You know, I know
8 those communities, particularly the Sahtu
9 communities, they are very very concerned about doing
10 things that will support the hunting way of life.
11 They see that as really one of the basis and the
12 future of their communities.
13 So you know, they are not looking at hunting
14 is something that belongs in the past and we're
15 getting into this dismissing that. They are saying
16 we've looked at this carefully. We think, you know,
17 it's not going to have as much environmental impact.
18 We think we can continue to protect our hunters and
19 it's probably in our interest to take an equity
20 position. I have concerns that that will put them in
21 a similar conflict of interest still around the
22 environmental impacts. But you're not looking at
23 something that's going to affect the whole river
24 system. So the impacts are less.
25 MR. SARGEANT: Thank you.
1945
1 THE CHAIRMAN: Mr. Mayer.
2 MR. MAYER: Dr. Kulchyski, I have some similar
3 concerns that Mr. Sargeant has. You say you're
4 writing a paper on the agreement or the memorandum
5 that presently exists between Nisichawayasihk and
6 Hydro?
7 MR. KULCHYSKI: That's right.
8 MR. MAYER: And how long have you had those
9 documents?
10 MR. KULCHYSKI: I'm drafting something, so I
11 have a draft of something. I gave a paper at a
12 conference at the University of Winnipeg. It's all a
13 blur to me now because it's been a very busy month
14 but I believe it was three weeks ago.
15 MR. MAYER: We heard about that conference.
16 Have you had the opportunity or did you in fact read
17 the material filed by Hydro and Nisichawayasihk on
18 this very issue?
19 MR. KULCHYSKI: I've read the Statement of
20 Understanding and then I followed the debates in the
21 newspaper but I haven't had the opportunity to read
22 further.
23 MR. MAYER: Were you aware, doctor, that
24 volumes of documents have been filed before this
25 Commission all of which have been in the hands of the
1946
1 person who calls you or of the organization that
2 calls you today as a witness and you're telling us
3 you haven't read any of that?
4 MR. KULCHYSKI: I'm telling you that I'm a
5 volunteer witness. I happen to have a full-time job
6 that's a very busy one. And so I want to thank Gaile
7 Whelan Enns for inviting me here. She's made those
8 documents available to me and I must say she leaned
9 on me quite heavily to try and have my report
10 prepared. If I was testifying tomorrow rather than
11 today, I might have been able to bring a document.
12 That's how close I am. But I will not bring
13 something that's not complete and I haven't had the
14 chance to kind of dot the I's and cross the t's. I
15 simply won't do that.
16 MR. MAYER: Doctor, I too have a day job and
17 for all intents and purposes on this Commission, I am
18 a volunteer and I have read that material. Now,
19 you're giving evidence today on an agreement or
20 criticizing an agreement that you have seen bits and
21 pieces of --
22 MR. KULCHYSKI: I've seen the agreement and
23 read it closely.
24 MR. MAYER: Okay.
25 MR. KULCHYSKI: And --
1947
1 MR. MAYER: Do you have the whole agreement,
2 sir?
3 MR. KULCHYSKI: I'll show you what I have.
4 MR. MAYER: I'll take your word for that, sir.
5 MR. KULCHYSKI: October 2003 Summary of
6 Understanding.
7 MR. MAYER: Okay.
8 MR. KULCHYSKI: And I should say that this
9 refers to, and I'll be happy to look at it when it
10 comes out, a further deal that would be signed
11 afterwards that would be in legal language. I'll be
12 happy to look at that. You know, I'm concerned about
13 the big picture here rather than all of the technical
14 details. I appreciate your work in looking at all
15 the technical details. I look at the agreements to
16 legal understandings as I look at treaties, the
17 actual legal understandings.
18 MR. MAYER: But then, sir, if you've read that
19 agreement, you know it is not legally binding, don't
20 you?
21 MR. KULCHYSKI: That's right.
22 MR. MAYER: So you talk about legal
23 understandings, what they have is a Memorandum of
24 Agreement. My concern, sir, is that you are asking
25 us to substitute your decision on the issue of this
1948
1 agreement and this partnership for that of the
2 Nisichawayasihk Cree Nation and Manitoba Hydro and
3 the members of the Nisichawayasihk Cree Nation who
4 have voted on this. Doesn't that seem a little
5 paternalistic to you, sir?
6 MR. KULCHYSKI: No, it doesn't at all seem
7 paternalistic. And let me say that you are
8 absolutely correct. This is a non-binding agreement.
9 A project development agreement will be signed
10 subsequent to this.
11 I've seen a lot of ratification processes go
12 on in communities I didn't have time today to talk to
13 you about, although I'd be happy to talk to you
14 about. The ratification process that's discussed in
15 this agreement is kind of a travesty actually in the
16 sense of there's no time line that's mandated. So
17 you can have an agreement and try and have the
18 community vote on it within a few days. These are
19 agreements that will affect people's long-term future
20 and often they are presented with a legal document.
21 Usually -- well, not usually, almost always
22 the ratification processes involve people coming and
23 selling an agreement to the community without any
24 opportunity for internal community debate. I also
25 happen to know that there's a good portion of the
1949
1 community that opposes the agreement. And since
2 their voices aren't largely paid for or subsidized
3 and since they don't have offices, fax equipment,
4 computers, I do partly make it my job to try and
5 speak for those who don't get the opportunity and
6 don't have the resources sometimes to speak for
7 themselves. Although I believe the Commission has
8 probably heard from a few of them here.
9 MR. MAYER: I have no further questions.
10 THE CHAIRMAN: Mr. Nepinak.
11 MR. NEPINAK: Thank you, Mr. Chairman. Dr.
12 Kulchyski, first of all, I want to commend you for
13 the work that you are doing and my question is, I
14 guess no disrespect to your opinion, but I also come
15 from a treaty area, a treaty 2. Treaty 2 and treaty
16 5 overlap. And my question is, you know, I guess the
17 growing demand by our First Nations people. I had
18 the opportunity to lead the community at one time.
19 My community is situated below the Hydro
20 development areas south of Grand Rapids. To the
21 south, we have agricultural development. And at one
22 point, as you stated that, you know, I can recall
23 back to my childhood that I don't think there was any
24 unemployment, you know, the trapping, you know, the
25 fishing. The hunting was abundant. And shortly
1950
1 after those years, a fur block was developed
2 overlapping the Treaty areas 2 and 5. Fur blocks
3 were to protect our way of life, mainly our trapping
4 in the late forties, early fifties. It's a similar
5 process as what the NCN has done through their
6 resource management area to protect, you know, those
7 traditional hunting areas.
8 And in my own experience, doctor, you know,
9 unfortunately the fur trade has been weakened. You
10 know, the hunting we enjoyed at one time is no longer
11 there due to settlements as you outlined. And I
12 agree that, you know, we welcome the new settlers and
13 they have I guess every right to enjoy the resources
14 in the country we so enjoy.
15 But my question to you is, firstly, I think it
16 was an excellent presentation by the Chief of NCN
17 and, you know, his councillors and his people as to
18 why they entered into this kind of an arrangement
19 with Manitoba Hydro. You know, through their
20 documentation, it's an excellent work that they have
21 done. But I'm not doubting that I'm making a
22 decision here now.
23 But my question to you, doctor, is for us, my
24 community, we're now over 100 per cent larger in
25 population than we were at the time you know. And if
1951
1 you look at the surveys that were done by NCN and I
2 think every First Nation is experiencing the same
3 dilemma, a fast growing population, the demand on our
4 resources. What then do we now do with the
5 unemployment you know? I'd like to ask you what do
6 you recommend to the Commission? What should
7 governments do, today's governments, you know,
8 today's corporation? I guess that is my question.
9 Thank you.
10 MR. KULCHYSKI: Well, there's a couple of
11 things I'll pick up from what you said and then I'll
12 answer your question directly. But one is, in
13 effect, this is a decision about whether the northern
14 communities are going to basically go the same way as
15 the southern communities. And the southern
16 communities, Aboriginal communities mostly had to
17 give up on the hunting way of life and experienced
18 extraordinary problems and are still trying to decide
19 then what kind of economies can they have because the
20 communities want to stay together. That's one of the
21 features that defines them. They want to remain as
22 communities. They want to remain connected to each
23 other but they have virtually no sustainable economy
24 and not a sufficient land base to build much of a
25 sustainable economy and so they are in serious
1952
1 trouble.
2 The northern communities have, many of them,
3 the basis for continued sustainable economy. And
4 that's effectively what we're talking about
5 destroying. And I've seen northern communities where
6 they have small scale economic development, a degree
7 of commercial fishing, a degree of tourism, a degree
8 of craft industries. And actually the communities
9 promote and support people going out on the land.
10 They have schools for the young children that take
11 place out on the land. They have programs that try
12 and support hunters and try and support people going
13 out on the land. So that you can use contemporary
14 technology to be settled in one place but use vast
15 regions worth of resources.
16 Technology, since really the mid-sixties, can
17 actually allow centralized communities to use much
18 larger land areas in a way that was much harder for
19 people to earlier in this century. And there's been
20 very little that's promoted, little to nothing that's
21 promoted that kind of a vision in Aboriginal
22 communities. I would say, you know, we can go the
23 path of industrial style economic development and
24 create marginal, very poorly supported
25 infrastructures of suburbs that look like poor
1953
1 versions of suburbs in Southern Canada. And I would
2 say ultimately create more despair and real hatred
3 for what's been done to the land that can't be
4 changed.
5 Or we can say stop and we can say maybe we
6 should look at what sustained the people here for
7 thousands of years and maybe there are ways with the
8 technology we have and the large amounts of land that
9 are still left intact that that could be the basis.
10 And then other things can work around it. You can
11 find other forms of economies that will work with it.
12 But until you change your thinking and say no,
13 this isn't some outdated way of life and this isn't
14 something that's gone and this isn't something that
15 we don't really care about anyway, you have to start
16 with the presumption this is something we value.
17 This is the bedrock of these communities and
18 everything else we're going to do is going to be, in
19 respect, working around that. It's a change in
20 attitude.
21 And that's what I think respect for the
22 treaties really implies, that's what the treaties in
23 my mind were about. So I would say those forms of
24 economic development.
25 Every time I see young people go out on the
1954
1 land with elders, I see young people who start
2 getting inspired and getting a little bit of hope and
3 who start believing in themselves. Every time they
4 are sent down to the south, they look at models and
5 say well, can I -- and they can achieve that but it
6 creates senses of doubt and insecurity.
7 I think people need to walk in the footsteps
8 from the past into the future and gain pride and have
9 that pride in what was done in the past. More
10 important than anything else, if people can have
11 that, they will have hope. And if they can have
12 that, they will have a future.
13 If they grow up having gone hunting and
14 fishing on the land with their grandparents and then
15 when they are in their twenties and thirties, they
16 will see that their own people decided to allow the
17 land to be destroyed, I don't see much hope there.
18 THE CHAIRMAN: Mr. Nepinak.
19 MR. NEPINAK: Thank you. Could you elaborate
20 a bit on the proposal that was laid out by the
21 proponents on traditional knowledge?
22 MR. KULCHYSKI: I didn't see what was laid out
23 by the proponents on traditional knowledge. But I'll
24 say this much. Again, with anything like that,
25 right, we can study it. We can put it in a box and
1955
1 put it in a museum, right. Hallelujah, it's in a
2 museum. People can go to see it one day a month.
3 That doesn't do anything for a culture. A culture
4 survives if it's alive. If you can hear the children
5 speaking their own language in the playground, you'll
6 know you've got a culture.
7 If we've got ten tonnes of volumes of reports
8 on traditional knowledge that have been researched
9 and put in the library, you don't have a culture,
10 you've got a library.
11 MR. NEPINAK: Thank you.
12 THE CHAIRMAN: Ms. Kathi Kinew Avery.
13 MS. AVERY KINEW: Professor Kulchyski, I just
14 have one or two comments about treaties. You
15 referred people to Supreme Court judgments where it
16 said to interpret them within the context of the
17 times. And surely it would be within the context of
18 the times to look at that Summary of Understanding
19 within the whole development that the Nisichawayasihk
20 are seeking. And part of it was what Mr. Nepinak
21 referred to the traditional knowledge, not to set it
22 aside in a museum but to ensure that if a project
23 goes ahead, that it would respect the sacred lands
24 and the viable lands that they would use for hunting.
25 So I wonder about your structural analysis if
1956
1 you're just looking at papers and speaking with one
2 component of the First Nation when actually they've
3 been working for several years, at least we heard
4 yesterday since 1996 to make sure if a project goes
5 ahead, it respects the people, the land, the
6 resources, the treaty.
7 MR. KULCHYSKI: Well, I should say I look at
8 the papers in the context of the travel I've done to
9 very many Aboriginal, particularly northern
10 communities. And I think about these things as a
11 human being on this earth and what the future holds.
12 The Summary of Understanding actually is not a
13 treaty document. It says it in the document itself.
14 It's kind of hidden at the very back. I'll read to
15 you what it says. It say,
16 "Nothing in this Summary of
17 Understanding or any other
18 arrangements or agreements
19 contemplated in this Summary of
20 Understanding which means the Project
21 Development Agreement that would come
22 subsequent from it is intended to
23 alter Aboriginal or Treaty rights.
24 Recognized and affirmed under Section
25 35 of the Constitution Act."
1957
1 It doesn't say diminish Aboriginal or Treaty
2 rights, it says alter which means that there's no way
3 that this document or the documents that flow from
4 them can actually be seen as a treaty which is one of
5 the weaknesses of these documents that I talk about
6 in my more detailed analysis in the first instance.
7 MS. AVERY KINEW: Would you say the Peace of
8 the Brave in Quebec is a treaty?
9 MR. KULCHYSKI: I would say it is, yes.
10 MS. AVERY KINEW: On what basis?
11 MR. KULCHYSKI: Well, I've talked to various
12 of the negotiators and none of them can answer that
13 question firmly. There's no language that says it
14 isn't a treaty.
15 So the Sioui decision, actually the one that I
16 referred you to, outlines the criteria for assessing
17 whether something is a Treaty or not. And it talks
18 about the capacities of the various parties and the
19 nature of the document itself. And I would say if
20 you apply those criteria, actually both to the
21 Northern Flood Agreement and to the Peace of the
22 Braves, you would have to conclude that both of those
23 documents are treaties.
24 What keeps this document from being a treaty
25 is that it says it's not a treaty, very clearly in
1958
1 black and white.
2 MR. SARGEANT: It doesn't say it's not a
3 treaty what you read to us. Basically it's a
4 non-derogation clause. It says it doesn't affect the
5 existing treaties.
6 MR. KULCHYSKI: It says it doesn't alter
7 Aboriginal or treaty rights. If it doesn't alter
8 Aboriginal or treaty rights, I don't see how it can
9 be then said to be a treaty because if it were a
10 treaty, it would entirely alter.
11 MR. SARGEANT: I'm not saying it is a treaty
12 but it doesn't say it's not a treaty.
13 MR. KULCHYSKI: I'm saying it looks clear to
14 me that it's not a treaty.
15 MS. AVERY KINEW: Sorry, I don't want to get
16 carried away in this direction. I wasn't necessarily
17 saying it was a treaty, I was applying the same
18 approach that if you're going to have an
19 understanding, you need the context of the times.
20 MR. KULCHYSKI: Well I would say for me the
21 overriding treaty that deals with this situation is
22 Treaty number 5 and that's where we'd need some
23 context. And there we had Aboriginal people who
24 wanted as strongly as possible to put in black and
25 white that their way of life would be protected.
1959
1 And to the extent that they could find
2 wording, they articulated that as a hunting way of
3 life in the English language.
4 MS. AVERY KINEW: The Supreme Court has also
5 said that you don't have to be frozen in time, you
6 can evolve.
7 MR. KULCHYSKI: Well, sure. And I think
8 hunting itself has evolved in time as it evolved in
9 time before Europeans ever arrived on the continent.
10 MS. AVERY KINEW: As a hunting people, I would
11 think Nisichawayasihk would have looked at how to
12 protect their people's right to continue hunting.
13 And from evidence that we've had, that things have
14 happened. Because they've decided to proceed as
15 co-proponents, they have changed the access road to
16 where this construction site might be. They've
17 changed the whole design of the dam to be a lower
18 head. And traditional knowledge in that sense has
19 been put to work. And that would be the context in
20 which I'm wondering are you interpreting this Summary
21 of Understanding?
22 MR. KULCHYSKI: Well, I appreciate that.
23 Although again, the language in the Summary of
24 Understanding, which is what I've got in front of us,
25 talks about normally the water levels would be in
1960
1 certain degrees and so I worry that that's -- I would
2 love to have a copy and I will look at a copy of the
3 Project Development Agreement when it comes forward.
4 But if the language there is as weak as the language
5 in the Summary of Understanding and if
6 Nisichawayasihk then is one of the proponents and has
7 an equity position, you start having a conflict of
8 interest around protecting the environment. And I
9 would say in general, you're very clearly moving away
10 from seeing the hunting economy as the basis of the
11 way of life. That part of it seems to me I can't see
12 how we can deny that.
13 MS. AVERY KINEW: Just two more things. The
14 structural analysis you're doing does say that you're
15 comparing an interim document, Summary of
16 Understanding, with a final document, Peace of the
17 Braves?
18 MR. KULCHYSKI: When I see the final document,
19 I'll do an analysis of that as well but I'm right now
20 analysing what I have in front of me which is the
21 Summary of Understandings between the Nisichawayasihk
22 Cree Nation and Manitoba Hydro.
23 MS. AVERY KINEW: The last point I'd just like
24 to ask about is it's been brought up before by CASIL
25 too as to whether Nisichawayasihk leadership is in
1961
1 conflict of interest. And wouldn't you say it's a
2 fact of life that Chiefs and Councils are called upon
3 to do many things at once? You have to protect
4 rights, you have to develop your economy. You have
5 to see to the needs of elders and people who require
6 assistance. You want to provide opportunities for
7 young people by getting broadband Internet into your
8 communities. I mean everyday is a conflict and you
9 have to balance the interests of many.
10 MR. KULCHYSKI: I would certainly say it's a
11 case that there are general competing forces that
12 Aboriginal leaders as other leaders in society have
13 to deal with that put them in conflict. When I talk
14 about conflict of interest, I am talking about a very
15 specific thing that this agreement contemplates which
16 is a group that will be co-owners of a project also
17 supposedly has a role in monitoring the environmental
18 degradation. That means there's a specific conflict
19 of interest where on the one hand, it's in your
20 interest because you're in debt to make sure that the
21 project makes money. And on the other interest, what
22 might limit that project making money is strict
23 environmental standards. That's a very specific kind
24 of conflict of interest that's embodied by this
25 document that I'm concerned about. And it's
1962
1 different than the general nature of having to make
2 political decisions as an Aboriginal or even as a
3 non-Aboriginal politician. I think that becomes kind
4 of an objective conflictual position.
5 MS. AVERY KINEW: Okay. Thank you. I won't
6 pursue it. I'm sure others will.
7 THE CHAIRMAN: Dr. Kulchyski, I find that it's
8 unfortunate that you did not go beyond the Memorandum
9 of Understanding. You talk in terms as if you had no
10 knowledge at all about the environmental impact
11 assessment about the project. And I would like to
12 hear your comments based on a broader understanding
13 of what's proposed here.
14 It's a fact of life that every community makes
15 decisions for its future and you did make reference
16 or a distinction between southern communities and
17 northern communities in terms of their
18 sustainability. And you did yourself indicate about
19 the hundreds of millions that are being put in
20 agriculture. In spite of that, it's changing and has
21 changed rapidly. It's not so surprising that
22 northern communities would like to ensure their
23 sustainability as well. And in spite of that, there
24 will be some changes.
25 A community such as NCN looks at carrying on
1963
1 its livelihood and its culture but at the same time,
2 they also need the finances to ensure the survival of
3 the community to retain their community. And you
4 seem to imply that hunting and trapping is going to
5 make it possible for the community to stay forever as
6 it is as if it was in a sort of a vacuum because it
7 pleases us all to look back and say, well, there's
8 great value and culture there and we have to find a
9 way of sort of building walls around it to make sure
10 it stays the way it was. I seem to hear that in your
11 interpretation here that because it's sort of the
12 last bastion somewhere in the world where we have a
13 language spoken, where we have cultural values, we
14 sort of have to ensure that we protect them every way
15 and we prevent it from choosing for themselves
16 economic development to retain its people to do
17 exactly what you want.
18 So I am not so sure that you have taken enough
19 of a broad view of the issue in terms of what the NCN
20 is proposing here.
21 MR. KULCHYSKI: I'll say a couple of things in
22 response to that, and I appreciate your concerns.
23 First of all, in terms of the sustainability, I would
24 say right now northern Aboriginal communities are
25 sustainable. What threatens their sustainability are
1964
1 projects like this. It's not a question of, as in
2 farming communities, they developed -- you know,
3 within the last 100 years, haven't proven themselves
4 sustainable and we found actually that they are not
5 sustainable and there's lots of problems. With
6 Aboriginal communities, they were there for thousands
7 of years.
8 THE CHAIRMAN: Is that why they are leaving
9 their communities?
10 MR. KULCHYSKI: I'll come back to that but let
11 me respond to your first question first. We'll get
12 back to why people are leaving their communities if
13 you want to ask that as a question.
14 Northern Aboriginal communities have proven
15 themselves sustainable. And it's something like this
16 that will put them in the situation where they become
17 no longer sustainable in my view. That's the
18 problem. I'm not thinking about culture behind
19 walls. I think culture has adapted, culture has
20 grown.
21 Aboriginal culture, like other cultures, has
22 changed over time. I am not talking about hunting is
23 something that people practice the way they practised
24 the same 200 years ago. Obviously technology has
25 changed. The ways and forms of hunting have changed
1965
1 quite dramatically. But the values underlying
2 hunting culture has remained remarkably consistent.
3 You know, anthropologists at the beginning of
4 the 20th century, all the talk was about Aboriginal
5 people are disappearing, Aboriginal culture is
6 disappearing. At the end of the 20th century,
7 there's this remarkable talk about people were
8 surprised to find that Aboriginal cultures are
9 surviving and thriving in many respects. No thanks
10 to projects like this, thanks to the fact that in
11 northern communities, they've been isolated from
12 projects like this. And that's proven the basis of
13 their sustainability and their ability to survive.
14 Now, you can laugh about cultural
15 distinctiveness. You can say what's another culture.
16 I don't laugh about cultural distinctiveness
17 actually. I think that if Cree culture disappears as
18 a meaningfully different culture from Northern
19 Manitoba, we have done the world an enormous
20 disservice and ourselves an enormous disservice.
21 Whatever any particular culture can tell us about
22 what it is to be human, about how we can live with
23 the world around us, about how we can treat other
24 human beings gets lost to us.
25 I don't laugh when I think about what happened
1966
1 to the Baothuck in Newfoundland. We don't even know
2 what language group the Baothuck belong to. I don't
3 laugh when I think that 200 years from now, people
4 might look back at these hearings and say these
5 people really weren't concerned about culture. Now
6 we don't have it.
7 The reason why I don't laugh about it is
8 because I think about those Aboriginal kids who are
9 leaving their communities. And I'll tell you for the
10 most part, many of them, they are leaving because
11 they haven't had the proper exposure to their own
12 culture. They haven't been able to be proud of who
13 they are as Aboriginal people because most of what
14 gets taught and most of what goes on around them
15 doesn't give them the opportunity. They don't get
16 the opportunity to go in the bush. They don't get
17 the opportunity to be with elders. They don't get
18 the opportunity to take pride in the contributions
19 that their people have made.
20 I would say destroying those cultures or
21 dismissing them, we're really effectively condemning
22 those communities to be ghettos 100 years from now
23 and I think that that's for me almost criminal
24 behaviour.
25 THE CHAIRMAN: Well, everybody will agree with
1967
1 you on that point or a lot of people will and I'll be
2 the first one to agree with you on that. But to say
3 that the northern communities are better off because
4 they are in a position where they are very different
5 and they are allowed to retain their culture and
6 their language, I myself have worked in The Yukon and
7 found out that that is absolutely not the case except
8 for the Gwichin in the north because there is no
9 access to their community. But all of the other
10 languages, seven of them, are gone and they are gone
11 forever.
12 MR. KULCHYSKI: What that tells you is that
13 those communities that are more connected to the
14 industrial economy lose their culture. Those
15 communities that are more isolated and able to
16 maintain their hunting economy are able to keep it
17 and are better off for that. And we have the same
18 situation in Northern Manitoba.
19 THE CHAIRMAN: We will agree on that but then
20 we'll have to agree as well that that's not the
21 reality we live in.
22 MR. KULCHYSKI: Go to those communities. I
23 mean I have gone to Lac Brochet, put my cup in the
24 lake and drank the water. And I've almost never been
25 treated that respectfully by young people, by
1968
1 teenagers. I'm used to teenagers just dismissing
2 strangers. I'm quite impressed with the degree of
3 the strength of the culture that's there.
4 And this is an area I don't take anecdotally.
5 I do research on this. I've travelled to far
6 northern communities all across Canada and I'm
7 pleased to be back in Manitoba and working more in
8 Northern Manitoba communities doing that. And to me
9 where there's a hope, there's a strong hunting
10 culture that's being passed on to young people.
11 Where you can see elders who will be elders 50 years
12 from now is where you have hunting families in place.
13 THE CHAIRMAN: Unfortunately, more or less
14 come around to agreeing with what I said before
15 because when I gave you the example of the Gwichin in
16 the Northern Yukon, the only reason that that is
17 happening is because they are, within a wall and a
18 nut, have access to the rest of the world. So
19 basically, they haven't got a choice at this point in
20 time to evolve perhaps the way they would like to.
21 MR. KULCHYSKI: They have choices. There's
22 oil and gas developments constantly being proposed to
23 them, constantly being proposed to them. There's big
24 dollars constantly being presented to them for oil
25 and gas development. They have the Internet. I know
1969
1 people from the community of Old Crow who are as
2 articulate and world travelled as any people that you
3 will see. They have choices.
4 And the people who are most cosmopolitan in
5 Aboriginal communities, who have seen most of the
6 world, come to appreciate that it's their own
7 grandparents' hunting. That's the thing they love
8 the most. They go back to that constantly. I've
9 seen very cosmopolitan Aboriginal people from a
10 variety of communities, that's what they find they
11 love and I don't blame them.
12 THE CHAIRMAN: Any further questions? Mr.
13 Bedford?
14 MR. BEDFORD: Mr. Chair, we had not
15 anticipated frankly that witnesses would come today
16 and promise to deliver written material in the
17 future. We had thought the deadline for that was in
18 February. However, you, as Commissioners, will have
19 to decide if you are going to accept, from Dr.
20 Kulchyski or indeed any further witnesses, papers in
21 the future.
22 If you decide in Dr. Kulchyski's case that you
23 are going to accept a written paper from him, then we
24 most certainly will wait until we have received the
25 paper and read it before we ask him questions about
1970
1 the very many thought-provoking matters he's raised
2 here this morning.
3 However, if you decide that you're not going
4 to accept his paper, then it may well be that we can
5 ask some questions. I rather anticipate you may wish
6 to discuss that among yourselves, at least over the
7 noon hour. Certainly we would urge caution that if
8 you open the door and allow one expert to file his
9 written report after he's testified, I rather fear
10 you may be faced with the same request from other
11 experts. And I for one have difficulty understanding
12 how you would distinguish and allow one to file and
13 others perhaps not. But that is your decision to
14 make.
15 THE CHAIRMAN: I think I can respond for the
16 Panel that Mr. Kulchyski has made his presentation
17 and he has chosen to make it orally and we will
18 accept his oral presentation. And that is what will
19 be on the record.
20 So if you wish to question him on the basis of
21 his presentation, you may do so.
22 MR. BEDFORD: In that event, we would like a
23 short break so I can discuss with Ms. Matthews
24 Lemieux which questions we're able to put to Dr.
25 Kulchyski.
1971
1 THE CHAIRMAN: There may be others who wish to
2 ask questions. Mr. Abra?
3 MR. ABRA: Mr. Chairman, I can ask some
4 questions and that may take us through to the lunch
5 break in any event. I just have a few questions of
6 Dr. Kulchyski.
7 THE CHAIRMAN: Yes, proceed.
8 MR. ABRA: Dr. Kulchyski, my name is Doug
9 Abra. I'm the lawyer for the Commission. Do I
10 understand from your evidence that all you have read
11 is the Summary of Understanding related to this
12 application?
13 MR. KULCHYSKI: I've read quite a bit of other
14 stuff actually.
15 MR. ABRA: Well, what else?
16 MR. KULCHYSKI: Supreme Court cases, I
17 referred to the treaty itself. Actually I've read
18 the treaty itself. I've read a fair bit of treaty
19 history.
20 MR. ABRA: No, I'm sorry. I didn't make my
21 question clear, sir, I'm sorry. What I'm asking is
22 related to today, this particular application by
23 Manitoba Hydro and NCN, the only document that you've
24 read is it the Summary of Understanding. For
25 example, have you read any of the documents that had
1972
1 been filed that are known as NFAAT or Needs For
2 Alternatives?
3 MR. KULCHYSKI: No.
4 MR. ABRA: You haven't?
5 MR. KULCHYSKI: No.
6 MR. ABRA: Have you read any of the
7 Environmental Impact statements that have been filed?
8 MR. KULCHYSKI: I've read some summaries of
9 what I take to be those but I haven't read the
10 statements themselves.
11 MR. ABRA: Which summaries are those, sir?
12 From where did you get them?
13 MR. KULCHYSKI: Well, from the Manitoba
14 Wildlands. I've gone through their website and they
15 have some of the documents and they have some
16 summaries of them.
17 MR. ABRA: I see. So this was a website of
18 Manitoba Wildlands that you read?
19 MR. KULCHYSKI: That's right.
20 MR. ABRA: And it was a document prepared by
21 Manitoba Wildlands?
22 MR. KULCHYSKI: I've read documents prepared
23 by them but I think they have also included documents
24 by the proponents.
25 MR. ABRA: You see, for example, there was a
1973
1 summary that was prepared by Manitoba Hydro and NCN
2 of 10 or 15 pages that describe the project. Did you
3 read that?
4 MR. KULCHYSKI: I am not an environmental
5 expert so I haven't gone into the environmental
6 aspects of the project.
7 MR. ABRA: As you've heard, Mr. Thomas, a
8 councillor from NCN, did testify before the
9 Commission. Did you read his evidence at all?
10 MR. KULCHYSKI: No.
11 MR. ABRA: You didn't read the transcript of
12 his evidence?
13 MR. KULCHYSKI: No.
14 MR. ABRA: Chief Primrose gave evidence before
15 the Panel the first day or at least made a statement
16 on behalf of NCN at the beginning. Did you read his
17 statement?
18 MR. KULCHYSKI: I should say I read newspaper
19 accounts of both of those but I didn't read his
20 statement.
21 MR. ABRA: But you didn't read his statement?
22 MR. KULCHYSKI: No.
23 MR. ABRA: I see. So you didn't hear Mr.
24 Thomas' explanation for the reason that NCN, from his
25 perspective, has decided to go into a partnership
1974
1 with Hydro as opposed to receiving lump sum
2 compensation?
3 MR. KULCHYSKI: Well, I read accounts of and
4 quotes of his statement but I didn't read his
5 statement itself.
6 MR. ABRA: Well, that was a newspaper article?
7 MR. KULCHYSKI: Yeah.
8 MR. ABRA: I see. Now, you also referred to
9 the James Bay Project where the decision was made to
10 accept compensation of $70 million. What did you
11 read with respect to that arrangement?
12 MR. KULCHYSKI: Actually, if you had read that
13 arrangement, you would find it was $70 million a year
14 for 50 years to a total of $3.5 billion.
15 MR. ABRA: Well, that may be but I'm wondering
16 what you read, sir, in preparation for giving
17 evidence related to that arrangement?
18 MR. KULCHYSKI: I heard testimony from a
19 member of Quebec Hydro, from a staff person of the
20 James Bay Cree and from one of the leaders who
21 negotiated the agreement. And I talked to them quite
22 extensively about what they have negotiated.
23 MR. ABRA: So in preparation for giving
24 evidence today, you did read evidence from the Quebec
25 hearings and did talk to a number of people?
1975
1 MR. KULCHYSKI: I didn't read any evidence
2 from the Quebec hearings. I heard papers,
3 presentations given by people from the Quebec
4 situation and I had a chance to talk to them
5 afterwards.
6 MR. ABRA: I see.
7 MR. KULCHYSKI: And I should say --
8 MR. ABRA: Do you know -- I'm sorry, go ahead.
9 MR. KULCHYSKI: The Summary of Understandings,
10 here we have it. You might say, oh, we need to read
11 3,000 pages in order to understand this. I would say
12 here it is. I have it. I looked at it. I read it
13 quite closely in the context of my knowledge of
14 Supreme Court decisions, Aboriginal rights, history
15 and various other things. So I'm not apologizing for
16 not having read the mounds that you want me to read.
17 I have a specific area of interest. I look at nation
18 to nation style agreements. I looked at this with
19 the knowledge that I have.
20 MR. ABRA: No, sir, I am not being critical of
21 what you've read or what you haven't read, I just
22 want the Commission to know what you've read and what
23 you haven't read.
24 MR. KULCHYSKI: It would take me a long time
25 to tell you what I've read. I'll tell you that much.
1976
1 MR. ABRA: Sir, I'm talking about this
2 hearing.
3 MR. KULCHYSKI: Well, even what's relevant to
4 what I've had to say today. For example, I didn't
5 mention Hugh Brody's book "The Other Side of Eden"
6 which paints a fairly compelling picture of the place
7 of hunting cultures around the world. It will be a
8 valuable resource for the Commission. But I
9 appreciate the fact that you've already got mounds of
10 hearing and you don't need another pile that I could
11 give you. But I tell you that I come to this well
12 prepared.
13 MR. ABRA: I see. And with respect to the
14 agreement in Quebec related to the James Bay Project,
15 you have read papers written about it? You've spoken
16 to people that were involved?
17 MR. KULCHYSKI: That's right.
18 MR. ABRA: And you have their version of why
19 they decided to accept what they did?
20 MR. KULCHYSKI: Yes, including Quebec Hydro.
21 MR. ABRA: Including Quebec Hydro, I see.
22 Have you talked to anyone from Manitoba Hydro here
23 related to this project?
24 MR. KULCHYSKI: Yes, I did actually. There
25 were some people from Manitoba Hydro and of course I
1977
1 heard from the Minister as well at our -- at the
2 conference at the University of Winnipeg.
3 MR. ABRA: I assume you didn't read any of the
4 evidence that's taken place over the last three weeks
5 related to their --
6 MR. KULCHYSKI: No, I haven't. As a matter of
7 fact, I've had a very busy last three weeks.
8 MR. ABRA: I'm just asking you, sir, whether
9 you read the evidence. That's fine. I have nothing
10 further. Thank you, Mr. Chairman.
11 THE CHAIRMAN: All right. If no other members
12 of the Panel have any questions at this time? Mr.
13 Bedford, do you still wish to take additional time or
14 do you wish to adjourn at this point in time until
15 after lunch?
16 MR. BEDFORD: Mr. Chair, I will wait. Thank
17 you.
18 THE CHAIRMAN: You will wait until after
19 lunch?
20 MR. BEDFORD: Yes.
21 THE CHAIRMAN: Are you available after lunch,
22 Dr. Kulchyski?
23 MR. KULCHYSKI: I teach at 2:30 so I'm
24 available after lunch.
25 THE CHAIRMAN: Is it possible to reconvene by
1978
1 quarter to one instead of one o'clock because it's
2 only 20 to 12:00 now. So if we take an hour and five
3 minutes, we should have enough time for lunch. It is
4 agreed? We will reconvene at quarter to 1:00 instead
5 of 1:00? All right. Thank you.
6
7 (PROCEEDINGS RECESSED AT 11:43 A.M. AND
8 RECONVENED AT 12:45 P.M.)
9
10
11 THE CHAIRMAN: All right, ladies and
12 gentlemen, we will continue, and I will ask
13 everybody to get with it. We are ready to begin,
14 Mr. Bedford.
15 MR. BEDFORD: I have no questions. I
16 know Ms. Matthews Lemieux has some.
17 THE CHAIRMAN: As soon as
18 Mrs. Matthews Lemieux gets here we will carry on.
19 MR. BEDFORD: I'm just informed that
20 Mr. Thomas will ask the questions on behalf of the
21 Nisichawayasihk Cree Nation.
22 THE CHAIRMAN: Thank you. You have
23 the floor, Mr. Thomas.
24 MR. THOMAS: Thank you very much. I
25 didn't quite get the name. Is it Mr. Kulchyski --
1979
1 MR. KULCHYSKI: Yes.
2 MR. THOMAS: -- or doctor I should
3 say. First of all, I want to explore what you
4 mean by preserving a hunting way of life. You
5 would agree with me that to do this our young
6 people would need to be taught the following by
7 our elders: The first item is how to trap, how to
8 skin the animal -- first of all, I should say,
9 would you agree with me on these particular
10 things, the following being how to trap?
11 MR. KULCHYSKI: Sure.
12 MR. THOMAS: How to skin the animal?
13 MR. KULCHYSKI: I would rather hear
14 the whole list and then I can --
15 MR. THOMAS: I prefer to answer the
16 questions as I am moving along?
17 MR. KULCHYSKI: How to skin animals?
18 MR. THOMAS: How to skin the animal?
19 MR. KULCHYSKI: How to what?
20 MR. THOMAS: How to skin animals?
21 MR. KULCHYSKI: Yes.
22 MR. THOMAS: How to tan hides?
23 MR. KULCHYSKI: Possibly, yes.
24 MR. THOMAS: How to hunt?
25 MR. KULCHYSKI: Yes.
1980
1 MR. THOMAS: How to prey for the
2 animals?
3 MR. KULCHYSKI: Yes.
4 MR. THOMAS: How to build a bush
5 cabin?
6 MR. KULCHYSKI: Yes.
7 MR. THOMAS: How to pick medicines?
8 MR. KULCHYSKI: Yes.
9 MR. THOMAS: How to dry, store and use
10 those medicines?
11 MR. KULCHYSKI: Yes.
12 MR. THOMAS: How to make tools and use
13 them?
14 MR. KULCHYSKI: Not necessarily, they
15 can buy a lot of tools that they need.
16 MR. THOMAS: How to fish?
17 MR. KULCHYSKI: Yes.
18 MR. THOMAS: How to smoke fish?
19 MR. KULCHYSKI: As long as I have a
20 chance to respond to the whole list, I will say
21 yes.
22 MR. THOMAS: How to choose the wood
23 and the type of fire to build to smoke the fish?
24 MR. KULCHYSKI: Sure.
25 MR. THOMAS: And you will agree with
1981
1 me that preservation of culture includes
2 following, which is not an exhaustive list;
3 language?
4 MR. KULCHYSKI: Yes.
5 MR. THOMAS: How to make drums and how
6 to use them?
7 MR. KULCHYSKI: I wouldn't say any one
8 particular element like that I would single out
9 and say, if you can't make a drum, you don't have
10 your culture. I would certainly say that normally
11 among a hunting community there are some people in
12 the community who know how to make and use drums.
13 MR. THOMAS: Bead work?
14 MR. KULCHYSKI: Again, I wouldn't say
15 that that is -- in Supreme Court terms -- integral
16 to the culture, but I would say it is important
17 and certainly I would think there would be people
18 in the community who would have that skill.
19 MR. THOMAS: How to make clothing from
20 hides such as moccasins and mukluks?
21 MR. KULCHYSKI: Not necessarily.
22 MR. THOMAS: How to choose a site for
23 a sweat lodge?
24 MR. KULCHYSKI: Sure.
25 MR. THOMAS: How to build a sweat
1982
1 lodge?
2 MR. KULCHYSKI: On the part of some,
3 yes.
4 MR. THOMAS: How to pick the stones
5 for a sweat lodge?
6 MR. KULCHYSKI: On the part of some.
7 MR. THOMAS: How to become fire
8 keepers and what that means?
9 MR. KULCHYSKI: Yes.
10 MR. THOMAS: How to carry a pipe and
11 about pipe ceremonies?
12 MR. KULCHYSKI: Yes.
13 MR. THOMAS: Dancing?
14 MR. KULCHYSKI: Yes.
15 MR. THOMAS: Are you aware of the
16 following NCN programs: Country Foods, hunters,
17 fishers, trappers and berry pickers are
18 responsible for finding food and bringing it back
19 to NCN, where it is packaged professionally and
20 distributed to elders and others in the community?
21 MR. KULCHYSKI: Yes.
22 MR. THOMAS: You are aware of that
23 program?
24 MR. KULCHYSKI: Yes, I am.
25 MR. THOMAS: What do you know about
1983
1 it?
2 MR. KULCHYSKI: I knew that there was
3 such a program in existence basically, and that it
4 was operating, and I have heard good things about
5 that program.
6 MR. THOMAS: Are you aware that we
7 have a place called Left Brook Lake which is a
8 cultural retreat, and it is a traditional village
9 that is used by our people for family and other
10 cultural retreats?
11 MR. KULCHYSKI: No. Is that the only
12 one or are there several?
13 MR. THOMAS: There is a number of
14 them. Mile 20?
15 MR. KULCHYSKI: No.
16 MR. THOMAS: It is an important
17 traditional site where we hold ceremonies.
18 MR. KULCHYSKI: I have heard of it,
19 actually.
20 MR. THOMAS: We have a program for
21 grades 3 to 9, where our youth are taught how to
22 build cabins, make tools, hunt, trap, fish, tan
23 hides, pick medicines, berry pick?
24 MR. KULCHYSKI: No.
25 MR. THOMAS: Do you know that we have
1984
1 a powwow club?
2 THE WITNESS: It doesn't surprise me,
3 but I don't know of it particularly.
4 MR. THOMAS: Do you know that we have
5 several dance and drum groups?
6 MR. KULCHYSKI: Yes.
7 MR. THOMAS: Are you aware that Cree
8 is taught in our school?
9 MR. KULCHYSKI: Yes.
10 MR. THOMAS: And you mentioned Treaty # 5,
11 and the $5 that my people are paid every year as a result
12 of Treaty. Do you know what the $5 represents to
13 my people?
14 MR. KULCHYSKI: It depends on which
15 terms -- I could speak to you at some length about
16 what the $5 may represent.
17 MR. THOMAS: I suggest to you that it
18 represents the sacred bond of peace between my
19 people and the Crown?
20 MR. KULCHYSKI: I would suggest to you
21 that it also at one time represented a material
22 way of the people, helping the people continue to
23 have their well-being. At some time ago when the
24 $5 was paid, that money was actually significant
25 to people in their annual incomes. Today it is
1985
1 not significant at all in their annul incomes. It
2 has both a symbolic and a material value. It is a
3 difficult question when you asked me what the $5
4 represents. I certainly agree with you that it
5 does represent the spirit of the treaty, the pact
6 that was made, the promises that were made, but I
7 would also say to those people that accepted that
8 money, it had very real material implications
9 about how their way of life was going to be
10 supported.
11 MR. THOMAS: You mentioned that you
12 attended a conference that helped form your
13 opinions about our project. Was that the
14 conference at the University of Winnipeg in
15 February of this year?
16 MR. KULCHYSKI: I would be misleading
17 you to say I merely attended it. I helped to
18 organize the conference.
19 MR. THOMAS: But that is the
20 conference that you are referring to --
21 MR. KULCHYSKI: That's right.
22 MR. THOMAS: -- that helped form
23 opinion, okay. You mentioned Thomas Berger. Are
24 you aware that a conference in Thompson in
25 November of 2003, where Mr. Berger recommended
1986
1 that to have peaceful co-existence between
2 Aboriginal people and industry, partnerships
3 should be established between them?
4 MR. KULCHYSKI: Not only am I aware he
5 said that, but I agree with it. It is the nature
6 of the partnerships that is the question that I --
7 MR. THOMAS: You mentioned that
8 Aboriginal youth have problems coming to school in
9 Winnipeg. Are you aware that as a result of this
10 project that a post secondary training centre
11 called Atoskiwin Training & Employment Centre is
12 being built in Nelson House, or in Nisichawayasihk
13 so that our children can be trained at home?
14 MR. KULCHYSKI: I have heard something
15 to that effect, yes.
16 MR. THOMAS: I should point out that
17 syllabics is also taught in grades 4 to 8. Are
18 you aware of that?
19 MR. KULCHYSKI: No.
20 MR. THOMAS: Thank you.
21 MR. KULCHYSKI: If I can then respond
22 to the totality of the questions. I am not
23 doubting that you have a good deal of programs
24 that support Aboriginal culture in your community,
25 as there are in many other communities. What I am
1987
1 suggesting is that, unfortunately, this deal will
2 go against the grain of many of those programs.
3 There is no use training people to be out on the
4 land if you end up destroying the land itself, or
5 upon the water upon which people depend. Teaching
6 young children the language in the school sounds
7 very nice, but if they are not using it in the
8 playground, if they are not using it outside of
9 the school, nobody really learns a language by
10 having it taught to them in the school. People
11 learn the language by speaking it at home, by
12 speaking it with other children.
13 So those are kind of, often,
14 sometimes -- some of the programs that you
15 mentioned I think are very valuable, some are band
16 aid solutions. And it is clear to me that the
17 project being contemplated really works against
18 virtually the whole terrain of all of those
19 programs.
20 On the one hand you are doing some
21 laudable things really trying to do what you can
22 for your culture. On the other hand, if people
23 don't have access to the land and the land way of
24 life, I think all of those things will ultimately
25 have no impact.
1988
1 MR. THOMAS: Just as a supplementary
2 question I guess; we have an agreement that we
3 refer to as the implementation agreement for the
4 NFA, that was ratified in 1996. Have you read
5 this?
6 MR. KULCHYSKI: I haven't read it, I
7 am aware of it.
8 MR. THOMAS: You are aware of it. Are
9 you aware that many of the programs that I pointed
10 out have been established as a result of this 1996
11 agreement?
12 MR. KULCHYSKI: That was my
13 understanding yes.
14 MR. THOMAS: And my other question to
15 you is, have you ever actually been to
16 Nisichawayasihk?
17 MR. KULCHYSKI: Yes, I have. I should
18 say, you know, the counsel for the Commission, I
19 guess Mr. Abra, was asking me about all of the
20 documents that I haven't read. One of the things
21 that I didn't say in response to him, but your
22 question allows me to say it, is: Instead of
23 reading piles and piles of documents, I have
24 travelled to many communities and spoke to many
25 people, both about the broad issues that I have
1989
1 been dealing with here, and specifically about the
2 project that you are contemplating. So I came
3 here prepared to talk really, primarily based upon
4 people that I have talked to.
5 I was in your community in the late
6 1970's actually, so quite a time ago, I will say
7 that. And I have travelled to other Northern
8 Manitoba communities since I have been back to
9 Manitoba, and I look forward to the opportunity to
10 go to your community.
11 MR. THOMAS: You have been in Nelson
12 House in 1970 or so you say?
13 MR. KULCHYSKI: About 1978 or '79.
14 MR. THOMAS: Okay. That concludes my
15 questions. Thank you.
16 THE CHAIRMAN: Thank you. Other
17 questions? Seeing none, thank you, Mr. Kulchyski.
18 MR. KULCHYSKI: Can I make a
19 concluding remark?
20 THE CHAIRMAN: There is no questions
21 asked for you to -- you missed the opportunity to
22 do so when the questions were asked. I guess the
23 procedure normally is you speak at this particular
24 time when you are asked questions.
25 MR. KULCHYSKI: Thank you very much
1990
1 for your attention.
2 THE CHAIRMAN: Sorry, I am advised
3 that counsel for the Canadian Nature Federation
4 has the opportunity to re-direct or ask questions
5 of Mr. Kulchyski. I mislead you, but
6 involuntarily. But at the time I did, I think I
7 was right.
8 MS. WHELAN ENNS: Thank you,
9 Mr. Chairman, Gaile Whelan Enns speaking. I am
10 going to make an attempt to frame a question that
11 I thought was going to be answered a little while
12 ago.
13 Mr. Kulchyski, Dr. Kulchyski, would
14 you tell us -- and we do want to hear from Patrick
15 McCully pretty quick -- would you tell us why you
16 do what you do? What motivates you, in respect to
17 your area of expertise, your studies, your work
18 with your students, and the volunteer work you do
19 with communities?
20 MR. KULCHYSKI: Sure. As I said, I
21 went to Frontier Collegiate, a residential school,
22 I went from Bissett. The school was mostly a high
23 school for Aboriginal students. There were very
24 few non-aboriginal people there, I was one of
25 them. There were 400 kids in my grade 9 class,
1991
1 there were 36 kids in my grade 13 class. Of the
2 36, only one went to university, me.
3 I didn't have -- I didn't come from a
4 wealthy family. I didn't have more money than the
5 other kids that I went to school with. I
6 concluded that the only reason I went to
7 university and others didn't had to do with the
8 colour of my skin. So from the time I started
9 university, I was interested in trying to figure
10 out why that was the case, what was wrong with
11 people who were just as bright as me, who were my
12 friends, who somehow didn't have the kind of
13 opportunities that I had.
14 As I went along in my studies, I
15 started to travel to remote communities and I
16 could see that the hunting culture was entirely,
17 being entirely unappreciated, and part of that had
18 to do with money. Whenever there is a resource
19 development project, the people who are proposing
20 it have a lot of money and they bring a lot of
21 money to the table. Whenever Government is doing
22 something to communities rather than with them,
23 they do it with a lot of resources behind them.
24 Since I grew up in a poor background -- I am a
25 university professor, I am well paid now -- so I
1992
1 work for Aboriginal communities for free.
2 Particularly those that are faced with very large
3 challenges with very expensive processes. So, I
4 genuinely do it out of commitment and out of my
5 life experience I suppose.
6 THE CHAIRMAN: Thank you. I just want
7 to remind Ms. Whelan Enns as well that the
8 questions that you are allowed on the re-direct
9 have to be related to the information provided or
10 responses provided to questions.
11 MS. WHELAN ENNS: I will work to be
12 more specific. Thank you, to the chair.
13 I think that that is probably going to
14 close today. And I appreciate the reminder from
15 the secretary of the Commission in terms of
16 re-cross. Thank you.
17 MR. KULCHYSKI: I want to take the
18 opportunity to thank you, since I had to sit
19 through this morning hearing you being personally
20 insulted actually, I want to say that I think you
21 have done a service to the Province of Manitoba
22 and to this Commission by bringing those of us
23 that you have brought forward. Thank you.
24 MS. WHELAN ENNS: Thank you. And
25 thank you for being a volunteer today.
1993
1 MR. KULCHYSKI: Does this mean that I
2 am actually done this time?
3 THE CHAIRMAN: Yes. Thank you.
4 Sir, you may now proceed, and
5 introduce yourself, and Mr. Grewar will then
6 proceed to swear you in.
7 MR. MCCULLY: Thank you. My name is
8 Patrick McCully, I am the campaign director for an
9 organization based in Berkley, California, called
10 International Rivers Network.
11 MR. GREWAR: Sir, are you aware that
12 it is an offence in Manitoba to knowingly mislead
13 this Commission?
14 THE WITNESS: I am.
15 MR. GREWAR: Do you promise to tell
16 only the truth in proceedings before this
17 Commission?
18 MR. MCCULLY: I do.
19
20 PATRICK MCCULLY: SWORN
21
22 MR. MCCULLY: So thank you,
23 Mr. Chairman, thank you to the rest of the
24 Commission. I will just get going while the
25 technical problems are sorted out here.
1994
1 My presentation is not on the specific
2 projects under discussion here. I haven't read
3 the 10 linear feet of documents that Manitoba
4 Hydro has produced relating to this project, but I
5 am here to talk about the issue of the
6 international contacts and what are international
7 standards and international best practice, and
8 particularly, especially the World Commission on
9 Dams. And I am just picking out some of the
10 issues which the World Commission on Dams made
11 recommendations on, which I think are relevant in
12 this case and that I hope that the Commission will
13 look at. And I also will give a little bit of
14 background on what exactly was the World
15 Commission on Dams, and also a little bit about my
16 organization and myself.
17 Firstly, International Rivers Network,
18 we are a non-profit organization. Our mission is
19 to halt destructive river development projects,
20 and to encourage equitable and sustainable methods
21 of meeting needs for water, energy and flood
22 management. We work mainly outside of North
23 America, mainly in developing countries, but some
24 work in North America and European context, and
25 also in Japan.
1995
1 We provide technical and lobbying
2 support to local groups that have already been
3 affected by projects or that face projects in the
4 future. We also provide, we provide technical
5 assistance in terms of reviewing documentation,
6 feasibility studies and so on, and also lobbying
7 support in terms of trying to influence
8 governments on specific projects, and also at the
9 policy level. And we are seeking to try to
10 basically democratize the way water and energy
11 planning is done at the international level, and
12 then down to the national and regional levels.
13 Just to explain my own personal
14 involvement in the World Commission on Dams, I
15 don't speak for the World Commission on Dams, I
16 was not a member of the World Commission on Dams;
17 I was, however, very involved in lobbying for the
18 creation of the Commission. I played an important
19 role in getting NGOs, environmental, indigenous,
20 human rights groups and others to be involved in
21 the Commission, because the Commission was partly
22 funded by the World Bank, and a lot of the dam
23 industry was involved, so there was a lot of
24 suspicion from the people who had been critical of
25 dams, so I played a role in getting them involved,
1996
1 giving evidence to the Commission and so on.
2 I was a member of what was called the
3 Dam Review Reference Group, which was the group
4 which basically set the terms for the Commission
5 and chose the Commissioners, and that included
6 environmentalists, indigenous rights activists,
7 the Government of China, the World Bank,
8 representatives of the large dam industry. I was
9 also a member of the forum, which was sort of an
10 advisory, multi-stakeholder advisory group which
11 followed the Commission's work. I am currently a
12 member of the steering committee of the United
13 Nation's environment program project, which is set
14 up to promote discussion on the World Commission
15 on Dams report. The Commission itself does not
16 exist anymore. It was, as planned, disbanded on
17 the publication of the report.
18 The report itself is quite a hefty, I
19 think a 400 page document. There is also a
20 shorter -- for people who don't have time to read
21 that, there is a shorter overview that is also
22 available.
23 So, quickly, what was the World
24 Commission on Dams? It was an independent
25 Commission sponsored by the World Bank, which
1997
1 people here may know is a development bank based
2 in Washington DC. Almost all of the countries of
3 the world are members of it. It promotes,
4 supposedly promotes economic development in
5 developing countries. It has been one of the --
6 it has been the single largest funder of large dam
7 projects in developing countries in the last 60
8 years.
9 The other, the co-sponsor was IUCN,
10 International Union for the Conservation of
11 Nature, which is an umbrella group of
12 environmental organizations and Government
13 environment departments. It was a
14 multi-stakeholder Commission, and the different
15 stakeholders that come from all of the different
16 perspectives in the dam debate selected the
17 Commissioners, chose what the mandate of the
18 Commission would be. And also the funding came
19 from many different sources, it was about a
20 $10 million U.S. budget.
21 The initiative began at a meeting in
22 Switzerland in 1997, which brought together all of
23 these different interests. It took about a year
24 and a half of quite complex negotiations to
25 actually get the Commission going, and then
1998
1 released its report in November 2000 at a ceremony
2 in London with Nelson Mandela.
3 The Commission was disbanded on the
4 release of the report, but since then there have
5 been numerous follow-up initiatives. The main
6 sort of official follow on is this United Nation's
7 environment program, dams and development project.
8 And who were the Commissioners? There
9 were twelve Commissioners from a wide range of
10 different backgrounds and different parts of the
11 world. The Chair is the gentlemen up in the left,
12 Kader Asmal, who is the Minister for Water
13 Resources in South Africa. Vice-chair was an
14 Indian economist called Lakshmi Chand Jain. The
15 rest of the Commissioners came from the dam
16 industry, from indigenous rights groups, from dam
17 affected peoples organizations, from academia, and
18 river basin agency in Australia.
19 The mandate of the WCD was firstly to
20 review the development effectiveness of dams and
21 assess alternatives; and secondly, to develop
22 internationally accepted standards, guidelines,
23 and criteria for decision making in the planning,
24 design, construction, monitoring, operation and
25 decommissioning of dams.
1999
1 To do all of this there was a quite
2 extensive work program which involved -- just an
3 outline -- there was eight very detailed studies
4 of individual projects with about 100,000 U.S.
5 spent on each study, and consultations and so on
6 were involved. Again, spread widely around the
7 world, dams built for different purposes and at
8 different times. The North American example was
9 Grand Coulee, which affects Canada in that the
10 Upper Columbia River in British Columbia was quite
11 severely affected by that.
12 There is also a survey of, briefer
13 survey of 125 dams looking at what was projected
14 in terms of benefits and impacts of the dams, what
15 actually turned out where the dams had been built,
16 two country studies, 17 thematic reviews,
17 including on the socio-environmental, one of the
18 issues looked at was the greenhouse gas emissions
19 and reservoirs, which Hydro Quebec hosted a
20 workshop in Montreal to look at that issue, then
21 also looked at economic and financial issues, and
22 alternatives to dams, the various institutional
23 issues involved in the dam building. Water and
24 energy planning more widely, there were four
25 regional hearings and about 1,000 submissions that
2000
1 went to the Commission.
2 No hearings were actually held in
3 Canada. There was Canadian involvement in -- the
4 financial contributors included Manitoba Hydro,
5 who I understand did some contribution for a
6 workshop on the Grand Coulee study. Hydro Quebec
7 was a major contributor, I think around 200,000
8 U.S. they put in. The Canadian Government,
9 through the Canadian International Development
10 Agency, put in about 100,000 U.S. And SNC
11 Lavalin, the Quebecois engineering firm, put in
12 about $1,000.
13 Hydro Quebec has been actively
14 involved, beyond just putting in money, they were
15 actively involved in the actual process, being a
16 member of this advisory group called the WCD
17 forum, and now Hydro Quebec is represented on the
18 steering committee, which I am also on, for the
19 U.N. environment program dams and development
20 project.
21 So just to run through some of the
22 findings on impacts, in terms of social impacts,
23 first of all, the most striking figures is the
24 huge number of people that have been displaced
25 world-wide by dam projects. The Commission
2001
1 estimated 40 to 80 million people around the world
2 have been actually physically displaced. A number
3 of other people have been affected. As we know
4 from the Manitoba experience, it is not just
5 direct displacement which can affect people's
6 livelihood and lives.
7 The conclusion was that the impacts on
8 many of these people have been devastating. We
9 see it all around the world, whether it is in
10 North America, Africa, Asia, significantly
11 negative impacts. These negative impacts fall
12 disproportionally on indigenous people, Aboriginal
13 people. We have seen that in Canada, we have seen
14 it in the United States, we see it just about
15 everywhere that there are indigenous Aboriginal
16 people, we see that they suffer the brunt of dam
17 building.
18 Local economic benefits have been
19 provided to communities, but often these have been
20 transient because of the nature of the
21 construction. You have a boom and bust cycle when
22 the dam construction comes in.
23 Now, of course, there have been a lot
24 of services that have been provided by dams, there
25 is no question. They have provided obviously a
2002
1 lot of electricity, about a fifth of the world's
2 electricity, somewhere around 2.5 percent of the
3 world's total primary energy comes from hydro
4 power. About $2 trillion have been spent on dam
5 projects, as estimated by the Commission. So
6 there is no doubt that out of those $2 trillion, a
7 lot of services have been provided. But the
8 overall findings of the Commission was that, in
9 very many cases, not all cases, but very many
10 cases, the benefits have been much less than
11 claimed, and that other things could have been --
12 the money could have been invested otherwise and
13 it may have had better development outcomes.
14 The findings on biodiversity, like
15 60 percent of the world's major rivers are
16 affected by, moderately or severely affected by
17 dams and diversions. The impact of this
18 biodiversity has been about a fifth of the world's
19 freshwater fish species are now threatened,
20 endangered or extinct. There are a number of
21 different reasons for that. The single major
22 reason is habitat loss, and the major reason for
23 that is related to dam building.
24 In North America specifically, there
25 is 123 species of fish, mollusks, crayfish and
2003
1 amphibians have gone extinct in the 20th century.
2 Almost 40 percent of U.S. freshwater mussels
3 species are extinct or incredibly endangered.
4 That is mainly because of dam building in the
5 southeastern United States. The extinction rate
6 overall of U.S. freshwater species is extremely
7 high, about 5 percent per decade, which is
8 comparable to the losses in the tropical rain
9 forest, which gets a lot more attention.
10 These are findings on ecosystem
11 mitigation. Of course, there have been a lot of
12 efforts to try and lessen, to mitigate the impacts
13 of dam projects. The conclusion of the Commission
14 was that these have met with limited success for a
15 number of reasons, partly because of just a lack
16 of attention, partly because of poor predictions,
17 also just because in the inherent nature that it
18 is very difficult to predict what is actually
19 going to happen with these big projects because
20 they cause so many changes. Also at issue,
21 because there are so many changes, it is difficult
22 to cope with them and difficult to know how to
23 mitigate. And also a lack of monitoring, so that
24 no measuring is made of what impact has happened.
25 And a lack of compliance, even if you have a
2004
1 monitoring program, and you have recommendations
2 that actions should be taken, there is often no
3 authority which can force the dam operator to make
4 the changes in operation which would mitigate the
5 impacts. There were 87 projects which provided
6 data to the WCD, so this is actually data from the
7 developers themselves, or the operators
8 themselves, this is not environmental groups or
9 communities putting forward the evidence.
10 60 percent of the impacts recorded after
11 construction were all anticipated. And that is in
12 the context of very, generally very inadequate
13 monitoring, so probably more impacts were there
14 than recorded in that statistic.
15 So findings on technical and economic
16 performance -- just in terms of Hydro, I won't go
17 into the flood control, irrigation water supply --
18 just to say that actually their performance was
19 worse than hydro power, hydro power actually had
20 the better performance. And that multi-purpose
21 projects which try to do several things at once
22 perform the worst of all.
23 Of the 63 large hydro power dams
24 reviewed, 35 generated less power than predicted
25 Another 7, which did meet their targets, only did
2005
1 it because they increased the installed capacity,
2 in other words, more investment was required to
3 meet those targets.
4 Another issue which of course is a
5 major impact on dam economics is the cost
6 overruns. These averaged 56 percent over 81 dams
7 looked at, extremely high. Also time overruns are
8 very common. And only half of the dams reviewed
9 were able to be completed within a year of their
10 scheduled completion date.
11 So overall, the findings painted
12 rather a bleak picture of the record of hydro
13 power and of dams in general. But the Commission
14 did not say, okay, you know, we should now stop
15 using this technology. It did recognize that
16 there are going to be cases, even if you do the
17 best assessment of all different options, there
18 may well be cases where you see that the dam
19 really is your best or your least bad option. And
20 the real issue is how do we come up with a
21 decision making process which means we get the
22 best possible projects, whether those be dams, or
23 wind turbines, or flood control embankments? And
24 also then, once we decide through an open process
25 that dam is a best option, then how do we set up
2006
1 mechanisms to ensure agreements between
2 communities and dam builders? How do we ensure
3 compliance with agreements? How do we change this
4 record of impunity that has been in the past where
5 impacts have been felt and people have not
6 received compensation, and promises have been made
7 and not carried through with?
8 So the Commission came out with what
9 they call their seven strategic priorities. And I
10 will mention a couple of those that I think are
11 specifically relevant for the Manitoba case. The
12 seven priorities are, and these priorities are now
13 widely accepted by Hydro Quebec, by a lot of other
14 people in the dam industry, by the World Bank, by
15 quite a few governments. And Manitoba Hydro has
16 said, I think the first day, one of the earlier
17 days of the hearing, that the project under
18 discussion does meet these strategic priorities.
19 The priorities are, one, gain public
20 acceptance. Two, assess options, look at the full
21 range of what is available. And also not only
22 look at the options for supply, but first of all
23 look at the needs, what do we really need, and
24 then how do we meet, what options are there to
25 meets those needs? Thirdly, address existing
2007
1 dams. It was recognized that there are a lot of
2 outstanding problems around the world from
3 existing projects that need to be dealt with.
4 Sustain rivers and livelihoods, that we can no
5 longer go on building dam projects which are
6 destroying rivers and the livelihoods of the
7 people depending on those rivers. Recognize
8 entitlements and share benefits with the people
9 affected by the projects. Ensure compliance,
10 which is very important. And share rivers across
11 boundaries, which is not an issue in this case,
12 but is important in a lot of parts of the world
13 where you have international rivers.
14 So strategic priority two on the
15 comprehensive options assessment, some of the
16 relevant issues to be taken from this, firstly
17 that priority should be given to maximizing
18 efficiency of existing systems before building new
19 projects, so you have to make sure you get the
20 most bang for your buck from the existing projects
21 before you go ahead and build more.
22 Secondly, clearly formulate the
23 development needs and the objectives through an
24 open participative process, so that you don't just
25 have an open process for discussing how do you get
2008
1 that number of megawatts, but first of all you
2 decide, okay, how many megawatts do we want, how
3 many megawatts do we need?
4 And thirdly, you do a comprehensive
5 assessment of all of the different ways of getting
6 those megawatts, whether that be demand side
7 management, or Hydro power, wind turbines, or
8 whatever else.
9 Strategic priority 3 is addressing
10 existing dams, the dams that have already been
11 constructed. First of all, it is very important
12 that we need comprehensive post project monitoring
13 and evaluation processes. We need to know --
14 before we can of course assess what are the
15 outstanding issues and what needs to be resolved,
16 we need to know what actually have the impacts
17 been. We need to have some sort of monitoring.
18 It is very important that this monitoring be
19 multi-stake holder, it is not just the operator of
20 the projects that do it, the affected stakeholders
21 need to be involved in the monitoring. And it
22 should be at the basin level where this is
23 relevant where you have a basin, a whole basin
24 affected or interlinked basins affected by
25 projects, you need to look at the whole system to
2009
1 assess what are the impacts. Second main issue is
2 the need to establish formalized operating
3 agreements with timeline licence periods for all
4 large dams. And that these agreements or licences
5 should set out obligations for the operator and
6 provide a legal basis for the stakeholder to
7 participate in decisions on the changes in project
8 design or operation.
9 So this means that if you have a
10 licencing period dam, when that licence is being
11 negotiated, that the affected communities are able
12 to have a say on how the project is going to be
13 operated under the new licence. This is -- this
14 does happen in the United States for privately
15 owned dams, not for the Federal dams, which is a
16 big problem. But for the privately owned dams in
17 the U.S. there are extensive relicencing processes
18 that go forward and which have allowed a lot of
19 reoperation to occur at projects to minimize their
20 impacts on the environment and in some cases on
21 the native communities in the U.S. They also have
22 in some cases been opportunities for
23 decommissioning when it is proven to be more
24 expensive to continue operating the dam with the
25 mitigation measures than just to remove the
2010
1 project.
2 And following on the same topic, that
3 the decommissioning should be an option within
4 relicencing processes. And then the relicencing
5 processes should identify outstanding social
6 issues, develop remedial mechanisms directly with
7 the affected communities, and that priority must
8 be given to financing and negotiated reparation
9 plan before funding new dam projects in a specific
10 location or river basin.
11 So you use -- the proposal to build a
12 new project in the basin should be used as an
13 opportunity to go back to the people affected by
14 the previous projects and say okay, let's
15 negotiate how do we compensate and mitigate the
16 impacts of the previous projects. This doesn't
17 mean of course just cash compensation, although
18 that may be part of it, it also means actually
19 discussing, negotiating how you can operate
20 existing projects differently so that those
21 impacts are lessened, and also various different
22 measures, may not be operational changes, but
23 other measures to mitigate impacts of existing
24 projects.
25 And then similarly related to the
2011
1 social issues, identify and act on environmental
2 mitigation and restoration opportunities. Where
3 there are opportunities to restore the environment
4 they should be taken before any new projects go
5 forward.
6 Strategic priority 4, sustaining
7 rivers and livelihoods. There should be a basin
8 wide understanding of ecosystem functions, values
9 and requirements, and how livelihoods depend on
10 these ecosystems before developments are made.
11 The project proponents must assess ecosystem
12 consequences of the cumulative impacts of dams,
13 dam-induced developments and other options along
14 the full length of the river. This I suppose
15 should be quite obvious that we do need to have
16 this comprehensive basin wide knowledge before
17 proceeding, but in many cases that has not been
18 there. Secondly, emphasize the avoidance of
19 impacts rather than causing the impacts, and then
20 trying to mitigate or compensate for them. Fairly
21 maintaining the ecosystem integrity by providing
22 environmental flows, which is a major issue now
23 especially for existing dams, how do you change
24 the flow regime so that the projects have less
25 impacts than they do at the present. Which we
2012
1 know now is possible -- in some cases no impact on
2 economics of the existing projects, in some cases
3 it can be only a very small impact from the
4 economics.
5 I just wanted to present a few slides
6 on one of the issues that I think is of extreme
7 importance, but is receiving very little attention
8 in the current debate over hydro power is the
9 issue of climate change and what the WCD's
10 recommendations are of that. It says that we need
11 to consider the impacts on the performance and
12 safety of changing hydrologies -- there is a
13 little bit more about this later -- but basically
14 the hydrological records that we had in the past
15 are no longer the clear guide to the future that
16 we thought they were. We know our climate is
17 changing so we need to take account of that. The
18 hydro industry in generally worldwide is rather in
19 denial of this fact.
20 There is a little bit of work being
21 done in the western United States, the California
22 Department of Water Resources is looking at how
23 climate change is going to affect their water and
24 they are very worried about it, but in general
25 worldwide, very little attention is going into
2013
1 this, but it is a very major issue which we are
2 going to waste an awful lot of money -- we are
3 going to make it more difficult to adapt to
4 climate change if we don't take this into account.
5 And secondly is the issue of the
6 impact upon climate change of dams and reservoirs
7 themselves and that there is need -- we know that
8 reservoirs do emit greenhouse gases. It is less a
9 problem here, especially a problem in the tropics,
10 but there is an impact on greenhouse gas
11 emissions, and that when you build a new project
12 you need to do a system wide -- you need to look
13 at the emissions from the individual project, but
14 you also need to do a system wide review to see
15 how this building a new project may also change
16 the operations of existing projects which may have
17 an influence on emissions.
18 How is climate change going to affect
19 water sources? Well, it is going to intensify the
20 hydrological cycle. That means it is going to get
21 warmer, it means there is going to be more energy
22 in the atmosphere, it means there is going to be
23 more evaporation, there is going to be more
24 precipitation. The patterns are going to change.
25 Some areas are going to get wetter, some areas are
2014
1 going to get dryer and some areas will get wetter
2 at some times and wetter at others, and vice
3 versa. None of us knows, even the best scientists
4 and modelists working on this issue can give any
5 sort of an accurate prediction of what is going to
6 happen when. But what we do know is that
7 hydrologies are going to change and become less
8 predictable. That the risks that we can
9 accurately -- or the risks that we can't
10 accurately predict future stream flow are much
11 higher than we previous thought they were.
12 Severity and frequency of droughts is
13 going to increase everywhere. We are going to see
14 especially major impacts on glacier and snow fed
15 rivers. This is a big problem for California, in
16 that our biggest water reservoir is the snow and
17 ice locked up in the Sierra mountains, and if that
18 it is going to melt earlier or a lot of the snow
19 is going to start falling as rain, it is going to
20 be a major problem in terms of water storage and
21 hydro power generation.
22 So, how does climate change affect
23 Hydro power? We are likely to see reduced power
24 generation because of droughts, which I believe
25 you have seen in Manitoba over the last year. And
2015
1 also greater evaporation. Probably more of an
2 issue in hotter areas. Increased hydrological
3 known certainties, so that the hydrological risk
4 is now much greater than what we previously
5 thought, and it should be included in all
6 feasibility studies for projects. It is quite --
7 it would be quite blinkered now to make investment
8 decisions for hundreds of millions of dollars
9 without looking at the very basic issue of how
10 much of a resource are you going to have in the
11 future, what is the risk that you are not going to
12 have what you thought might have.
13 Increased sedimentation is going to be
14 a problem partly because if you have more
15 downpours, more intense storms, that leads to a
16 much greater erosion.
17 Safety issues, because greater storms
18 mean greater rainfall, greater periods of intense
19 rainfall means that spillways may be overwhelmed
20 and risk of down failure. And of course existing
21 dams were made for past climates which really
22 aren't going to apply. And sadly it is still
23 going on in the existing dams being planned now,
24 the many that I have looked at are not looking at
25 these extra hydrological uncertainties, so it is
2016
1 also a problem for future projects. And also that
2 there is a sort of synergistic effect in that
3 climate change is going to have a large impact on
4 river biodiversity for various reasons. Just
5 drying up rivers is one, if there is more droughts
6 obviously that will affect fish biodiversity. One
7 way of adapting to climate change we know is to
8 have better corridors of all types, migration
9 corridors for animals so animals can get to
10 refuges where they may be safe.
11 So in the case of a river it means if
12 part of a river is dried up, fish and other
13 creatures are able to move say upstream where
14 there is still water. Dams fragment rivering
15 habitats and mean that this type of adaptation is
16 going to be more difficult.
17 So lastly taking the big worldwide
18 look, where do I see large dam building going? We
19 see there has been a large decline since the 1970s
20 worldwide when dam building peaked at about 500 a
21 year, 500 large dams completed a year. This is
22 large dams defining dams of over 15 metres in
23 height. Then we see a steady decline through the
24 1990s to a level of about half, less than half,
25 well under half of what it had been.
2017
1 A number of reasons for that. One is
2 what is called site depletion, that the best sites
3 have already been built on, especially the case in
4 the U.S. and Europe where so many dams have been
5 built, there are very few places that are economic
6 still to build. And of course there is opposition
7 from the affected people like we saw in Quebec
8 with the great whale project, and see now very
9 strongly in India, Brazil, Thailand, Chile, all
10 around the world where we look there is a lot of
11 local opposition to these projects being built.
12 The third main thing is economics,
13 especially privatization. Worldwide over the last
14 ten years there has been a concerted effort by the
15 World Bank and others to push the privatization of
16 big infrastructure projects and try to push these
17 into the private sector. And for dam building it
18 basically hasn't worked because the upfront costs
19 are so huge and because the hydrological risks are
20 so high, and people have for the first time become
21 aware of the very poor past performance of hydro
22 power projects. And people have realized that
23 very often the projects are not able to meet their
24 performance projections and especially the
25 vulnerability to drought.
2018
1 So, that is sort of a quick round up
2 of the international context with some relevance I
3 hope for Manitoba, and some things that I hope
4 will be interesting for the Commission and here
5 are some websites with more information. The
6 first is my own organization, International Rivers
7 Network. Dams.org is the website for the World
8 Commission on dams where you can go and download
9 this full report, as well as the several linear
10 feet of supporting documentation in the overview.
11 And then the bottom site, unep-dams.org, is the
12 site for the dams and development project which is
13 more information of the various follow-up
14 initiatives on the WCD. So with that I will just
15 wish everybody a little early Happy St. Patrick's
16 day for tomorrow, and I will close.
17 THE CHAIRMAN: Thank you. Mr.
18 Sargeant.
19 MR. SARGEANT: I have two or three
20 questions, but your last slide, were the numbers
21 correct, were there 5500 large dams built in the
22 70's?
23 MR. MCCULLY: Yes. One thing about
24 those figures, as I say, they exclude China which
25 is half of all of the world's large dams, so tose
2019
1 are actually figures for the world outside of
2 China. If you included China, it would just be a
3 higher peak and a higher drop off, because the
4 1970s also had a huge spell of dam building.
5 MR. SARGEANT: How many of those were
6 Hydro power dams? Surely there weren't 5500 dams
7 build worldwide.
8 MR. MCCULLY: No, there is about --
9 the figures are not very precise, but something
10 like 45,000 large dams that are in existence
11 worldwide, of which something like 23,000 are in
12 China. Of those 45,000 large dams I think
13 somewhere under 20 percent are hydro power.
14 MR. SARGEANT: Okay. What is the
15 bottom line, what was the bottom line of the
16 report of the World Commission on Dams in respect
17 of hydroelectric dams? Is it that they shouldn't
18 be built or that they should be built, but taking
19 into consideration all of those cautions that you
20 showed us?
21 MR. MCCULLY: Yes, the Commission
22 didn't say for any purpose dams should not be
23 built. They recognize that large dams should
24 remain an option for all of those purposes, but
25 that the decision making process had been very
2020
1 flawed in the past, so that they put forward what
2 is -- really it is a very stringent set of
3 recommendations, but they thought that because the
4 past problems have been so severe that the future
5 processes needed to be very stringent to make sure
6 that mistakes were not repeated and that if the
7 projects were built, they would be good projects
8 and would really realize benefits and would be in
9 the greater interest.
10 MR. SARGEANT: Now, did the Commission
11 conclude or does the World Bank take a position on
12 whether or not, or what is the best source of
13 electrical energy? I mean, do they take a
14 position that hydro dams are the best or not the
15 best?
16 MR. MCCULLY: The World Bank's
17 position is pretty controversial at present. I
18 can't speak for the World Bank, but if I try to
19 fairly paraphrase what I think their position
20 would be, it would be that in developing countries
21 all viable options should be looked at within
22 social environmental constraints. They would say
23 something like that. In reality most of their
24 energy lending, about 94 percent goes to coal, oil
25 and gas projects, less than 94 percent.
2021
1 94 percent is including -- includes large hydro,
2 but the majority of that is fossil fuels. And now
3 they say about 6 percent of their lending is going
4 to energy efficiency in the new renewables. The
5 World Commission didn't come up with any -- it
6 didn't say particularly this option is necessarily
7 better, but it did say that a lot of -- the
8 framework for energy planning is changing because
9 these new options, especially wind power,
10 geothermal and biomass, and coming down the line
11 solar now are increasingly viable and a lot more
12 attention needs to be paid to them. And there is
13 a problem worldwide in that there is a big coal,
14 oil and gas lobby. There is a big hydro lobby,
15 because these are established industries, they
16 have all their money and their lawyers and
17 lobbyists and so on. The renewable industries are
18 still very small. In 20 years time they are going
19 to be big, powerful industries. Right now they
20 are not, so there needs to be actions to level
21 that playing field.
22 MR. SARGEANT: I understand about a
23 year ago the World Bank sponsored something called
24 the World Energy Forum in Washington DC, are you
25 familiar with that?
2022
1 MR. MCCULLY: The bank sponsors every
2 year, they have sort of an energy week. They do a
3 water week and then they do an energy week, and it
4 is probably the same thing that you are referring
5 to. I wasn't there, so.
6 MR. SARGEANT: You are not familiar
7 with what their discussion was at that time in
8 respect of hydro dams?
9 MR. MCCULLY: The World Bank's
10 position on hydro dams at the moment has actually
11 swung to be much more bullish, in that over the
12 past year or so they came out with a new water
13 strategy last March and since then they have been
14 much more I would say rhetorically pro large
15 Hydro. The World Bank largely backed out of
16 funding large hydro for almost a decade. Through
17 the '90s the amount of money that they lent for
18 large hydro showed a pretty steady decline. Now
19 they are now saying they are going to go back into
20 the sector. They are taking a very aggressive
21 attitude from our perspective, saying we have had
22 enough of all of these people complaining about
23 hydro power and we want to go out there and lend
24 for it. Privatization has not worked, so we are
25 going to put money back into these big public
2023
1 sector projects. I don't know what it means in
2 terms of concrete in the reverse, so to speak.
3 MR. SARGEANT: Thank you.
4 THE CHAIRMAN: Other questions? Mr.
5 Mayer.
6 MR. MAYER: Good afternoon, sir. Did
7 I hear you correctly when you indicated at the
8 beginning of your address that you hadn't had an
9 opportunity to assess the Wuskwatim project in
10 particular, or to compare it to any of the
11 recommendations that appear to have been
12 recommended by the report that you have been
13 referring to?
14 MR. MCCULLY: I read the transcripts
15 from the first day of the hearings, the
16 presentations by the proponents from the first
17 day, and I read background documents from the
18 Manitoba Wildlands website and from newspaper
19 coverage and some past coverage.
20 MR. MAYER: And you are aware then of
21 the basic nature of the Wuskwatim project? You
22 were aware it has been referred to as a modified
23 run of the river project. How does your
24 Commission perceive run of the river or modified
25 run of the river projects as opposed to projects
2024
1 that require significant reservoir or forebay?
2 MR. MCCULLY: The Commission didn't
3 come up with any specific recommendations on run
4 of river versus storage projects. But I think
5 clearly if you applied the Commission's
6 recommendations that they would -- it would be
7 easier to build run of river projects. The
8 Commission also didn't make a recommendation
9 because it is very -- run of river is a very
10 vaguely defined term. It is used differently in
11 different contexts. It is funny actually, there
12 has been a tendency, especially in the last ten
13 years or so, to call more projects run of river.
14 Acres International, which is an
15 Ontario based engineering firm, very big
16 internationally, did a study of dams in the
17 Macong, and they called it -- because dams were
18 becoming so controversial at the time, the early
19 '90s, they wouldn't even call it a dam study, they
20 called it a run of river study. And instead of
21 reservoirs they called it ponds, so they had 60
22 kilometre long ponds along the Macong. But it is
23 not very clear. Some people call some projects
24 run of river and others wouldn't, so it is not a
25 clear term.
2025
1 In this case I understand it is quite
2 complicated because the river they are talking
3 about is not a natural river, its flows are many
4 times larger than the natural flows. It is a sort
5 of a run of a modified channel would be the
6 description.
7 MR. MAYER: Understanding that the
8 Burntwood River has been affected significantly by
9 Churchill River Diversion and by the augmented
10 flow program, you said you saw the Hydro
11 presentation, so you know that the pond that you
12 referred to is a fraction of a square kilometre,
13 and you know what Hydro means by modified run of
14 the river, so the comments that you made about the
15 60 kilometre pond and Acre's comments about run of
16 the river, I trust you are not suggesting that
17 that applies to the Wuskwatim project?
18 MR. MCCULLY: I made that comment to
19 say that it is hard -- there is no hard and fast
20 definition of what run of river is. So the
21 Commission therefore did not try to define run of
22 river, or to say that run of river is acceptable
23 and storage isn't. In some parts of the world run
24 of river dams have had major impacts, especially
25 on migratory fish, on the Columbia River and the
2026
1 tributaries of the Macong and elsewhere, and the
2 Mississippi also.
3 MR. MAYER: I recognize that. But you
4 also I trust then from reading the transcripts of
5 the Hydro presentation are aware what precautions
6 they appear to have taken and their prediction
7 with respect to even fish survivability through
8 the turbines?
9 MR. MCCULLY: I didn't come here to,
10 you know, sort of come down for or against this
11 project. I don't feel that I have sufficient
12 knowledge of the project to give an opinion on it.
13 I just want to say that there is parts of the
14 Commission's recommendations which I think are
15 important in this case, especially I think the
16 issues to do with dealing with existing projects,
17 which I think are very relevant here.
18 MR. MAYER: Unfortunately we have of
19 course limited jurisdiction to deal with -- we
20 certainly have some jurisdiction to deal with the
21 effects as they would relate to the whole of the
22 system, we are specifically not permitted to go
23 back and particularly review other hydro projects
24 that may have been constructed in the past. I
25 thank you very much, sir, I have no further
2027
1 questions.
2 THE CHAIRMAN: Sir, I just wanted to
3 ask one question. Has the World Commission on
4 dams or your organization, International Rivers
5 Network, do you comment on projects that are
6 proposed? Like, for instance, in Guyana right
7 now, the huge hydro electric project, or in
8 southern Mexico, or the project that is currently
9 being developed on the Yangtze in China?
10 MR. MCCULLY: We have been working on
11 projects all over the world for the past, I think
12 maybe we are 16 years old now, our organization,
13 so we work in China, we work in India, Nepal,
14 Pakistan, large parts of South America, a lot of
15 places. So we have been involved in some of those
16 projects. As I say, often our role is not -- is
17 to provide sort of technical support to local
18 community organizations or environmentalists or
19 indigenous groups on reviewing technical studies,
20 giving them information about what is the record
21 of other dam projects around the world, giving
22 them information on what is the record of the
23 companies involved in the projects, or explaining
24 to people what the policies are of lenders like
25 the World Bank, so that they can make sure that
2028
1 lenders follow their own policies and hold them
2 accountable.
3 THE CHAIRMAN: I should have been more
4 specific. I wanted to know if you had been or
5 were currently involved in the project in Guyana
6 and the major proposed project for southern
7 Mexico?
8 THE WITNESS: In Guyana, we are doing
9 some work in the aluminum industry and I have
10 heard about this Guyana project because it is
11 mainly to provide power to produce aluminum, so we
12 have been contacted by some Guyanese, I am not
13 sure who, some people in Guyana have contacted us,
14 but I am not working on that project myself, and
15 we are not very active in it.
16 In terms of southern Mexico, we are
17 very active working with people in southern
18 Mexico, Guatemala, Honduras and throughout
19 Mesoamerica because there has been a lot of damage
20 been done by hydro projects there, and a lot of
21 massacres that happened because of resettlement
22 linked to dam projects built during the
23 dictatorships, and now a lot of new projects are
24 being proposed and we are actively working in that
25 area.
2029
1 THE CHAIRMAN: Thank you. Questions?
2 From Manitoba Hydro or NCN?
3 MR. BEDFORD: Good afternoon, Mr.
4 McCully. My name is Doug Bedford and I'm counsel
5 employed by Manitoba Hydro. I can tell you that I
6 have had the benefit of reading the report to the
7 World Commission on dams. And you are correct, it
8 is over 400 pages, 404 to be precise. The date on
9 the copy that I have is November 2000, is that
10 correct?
11 MR. MCCULLY: That is the date of the
12 report, yes.
13 MR. BEDFORD: I think what won't be
14 apparent to those in the room who haven't had the
15 opportunity to read the 404 pages as you and I and
16 a few others in the room have, is that this report
17 is focused on large dams. There is repeated
18 references throughout the 404 pages to large dams,
19 is there not?
20 MR. MCCULLY: It is actually -- it is
21 not quite clear. It is called World Commission on
22 Dams, not large dams. Clearly the larger dams,
23 the more controversial projects that have the
24 bigger impacts are the best documented. But
25 actually they did look at the small dams as well.
2030
1 For example, one of the detailed case studies was
2 of a basin in Norway where most of the projects
3 were small, according to the industry definition
4 of less than 15 metres in height. It is a
5 complicated issue because there is also
6 distinctions between large and small hydro and
7 people often get mixed up between large dam, small
8 dam, small hydro, large hydro.
9 The distinction between large and
10 small hydro that we use and which the small hydro
11 power industry uses is 10 megawatts, but in other
12 places, it is some places 25 megawatts, some
13 places 30, sometimes 50. But the Commission
14 didn't get into the issue of really distinguishing
15 between large and small projects for a number
16 of -- well, for number of reasons. It is quite a
17 complex issue there. Recommendations don't say,
18 you know, small dam is good, large dam is bad, or
19 run of river is good, storage is bad, or vice
20 versa. They said whatever sort of water and
21 energy planning you are doing, this is the process
22 that you should follow.
23 MR. BEDFORD: You were correct that
24 the only case study in North America was the Grand
25 Coulee dam and the Columbia river basin, correct?
2031
1 MR. MCCULLY: Yes, out of the eight
2 detailed case studies.
3 MR. BEDFORD: That dam, Mr. McCully,
4 has a capacity of 6,500 megawatts, does it not?
5 MR. MCCULLY: If you say so. I don't
6 remember the latest capacity figures, but I will
7 trust you on that.
8 MR. BEDFORD: That is a large dam.
9 MR. MCCULLY: That is a very big dam.
10 MR. BEDFORD: Can you tell us what the
11 megawatt capacity of the proposed Wuskwatim is?
12 MR. MCCULLY: It is 200 megawatts, but
13 I think you know that yourself.
14 MR. BEDFORD: Relatively speaking that
15 is not a large dam.
16 MR. MCCULLY: That is a large dam,
17 there is no definition -- I will start again. The
18 definition of a large and small dam is not
19 actually related to the number of megawatts. The
20 majority of large dams don't provide any
21 electricity. There is many large dams that may
22 provide only 5, 10 megawatts of electricity.
23 However the issue, if it is an issue, it is not an
24 issue for me but it may be an issue for you, it is
25 a large hydro power project, under any definition
2032
1 I have seen of large hydro power, that is large
2 Hydro power.
3 MR. BEDFORD: The other thing that
4 those that haven't looked at the 404 pages will
5 not realize is that much of the report deals with
6 dams other than hydroelectric dams. You made
7 passing reference to that from time to time. But
8 this report deals certainly with dams built for
9 irrigation purposes, dams built to control
10 flooding, dams built to supply water supplies to
11 communities, all of those different kinds of dams,
12 doesn't it?
13 MR. MCCULLY: Sorry, is that a
14 question?
15 MR. BEDFORD: Yes.
16 MR. MCCULLY: As I said, it looks at
17 all of the different types of dams and hydro power
18 is only one kind of dam that it looks at.
19 MR. BEDFORD: I was a little concerned
20 watching the slides that you were leaping around
21 with the data and the statistics, and from time to
22 time you were identifying statistics related to
23 the group of hydro dams that were studied
24 worldwide and at other times you had statistics
25 that I detected, having read the report, really
2033
1 related to conclusions drawn from the studies of
2 all different kinds of dams, which I suggest to
3 you may not be particularly applicable to hydro
4 dams or indeed to dams in North America. Is that
5 fair of me to suggest that?
6 MR. MCCULLY: I don't think so. I
7 think that I presented the statistics as well as
8 they can be desegregated in the report, and the
9 Commission itself did a pretty good job, I think
10 of disaggregating the statistics as far as it is
11 possible between the different purposes. The
12 problem is that the dam industry has been very --
13 has done a very, very poor job worldwide of
14 actually keeping records on how many projects it
15 has built and what the impacts of the projects
16 have been and so on. So you can't actually say --
17 it is impossible to say, okay, 60 percent of
18 rivers are in some ways impaired by dams of which
19 X percent is affected by hydro, X percent of water
20 supply and X percent by flood control. You can't
21 do that. Because statistics aren't available and
22 it would be difficult anyway, because you have
23 multiple dams in the same basin, all of which may
24 affect the river, even though not all of them are
25 for one of those purposes, you have many, many
2034
1 dams which are for multiple purposes. You have
2 dams which are claimed to be for purposes which
3 really they are not. Often dams are claimed to be
4 for irrigation even if they don't supply
5 irrigation water, and claimed to be for flood
6 control even if they make floods worse, but it is
7 not possible to distinguish all of that.
8 So I don't think it is a fair question
9 to say, oh, when you are talking about hydro power
10 you should only include impacts of hydro power
11 dams. For example, 40 to 80 million people
12 displaced by dams, nobody knows, that is a very
13 vague estimate with a wide margin of error because
14 the data hasn't been properly collected. It would
15 be sort of a meaningless margin of error to then
16 say of this 40 to 80 million, X percent were
17 purely because of hydro power. And just to
18 conclude that also, the impacts, generally you see
19 the same set of impacts with hydro power as other
20 dams. There are some basic characteristics that
21 are the same and there are some other things that
22 are different, and they differ between different
23 hydro power dams according to how they are
24 operated.
25 MR. BEDFORD: What I had in mind when
2035
1 I asked the question was that I did recollect from
2 the reading that I did of the report, the subject
3 of cost overruns on the construction of dams. And
4 you did show us a slide that referred to 81 dams
5 immediately after you showed us a slide that
6 referred to a particular group of 63 hydro dams.
7 And my recollection of what the report found on
8 cost overruns in the construction of dams was that
9 that was a problem that was particularly relevant
10 in the third world, I recollect southeast Asia,
11 but I may be wrong on the geographic location.
12 MR. MCCULLY: South and central Asia
13 were the worst areas.
14 MR. BEDFORD: But the suggestion was
15 that it was in a different part of the world that
16 construction cost overruns occurred, although the
17 report was not clear as to why that happens in
18 that part of the world. The common sense
19 conclusion that I drew is you would have to
20 understand how business is done and how the
21 economies work on that part of the planet to begin
22 to come to grips with why they have cost overruns.
23 MR. MCCULLY: I think actually the
24 cost overruns are a problem in all parts of the
25 planet. In particular in South Asia the cost
2036
1 overruns are mind boggling, I can't remember the
2 exact statistics, but over 100 percent, it is
3 really pretty catastrophic. They are a problem in
4 all regions of the world. I don't know the
5 statistics in Canada. In the western United
6 States, the Bureau of Reclamation several years
7 ago said they were averaging 50 percent cost
8 overruns on their water projects. That is water
9 projects, not pure hydro projects, but I think it
10 is a worldwide problem. But I don't know the
11 statistics on Canadian dams.
12 MR. BEDFORD: My recollection is that
13 the report is in fact modestly complimentary of
14 the subject of cost on hydro dams, but as you have
15 said, the report speaks from a worldwide
16 collection of data, nothing unique to Canada,
17 correct?
18 MR. MCCULLY: I wouldn't say
19 moderately complimented. The Hydro power record
20 is definitely better than the irrigation record in
21 terms of cost overruns, but the irrigation record
22 is particularly bad. In terms of the economic
23 viability of the hydro power projects, which are
24 all developing country projects, one is built by
25 the World Bank and other development banks because
2037
1 that is where they have data. The rates of return
2 were averaged considerably less than what has been
3 projected.
4 MR. BEDFORD: On the subject of
5 greenhouse gas emission from the reservoirs, can
6 you tell me what the conclusion was regarding
7 boreal reservoirs?
8 MR. MCCULLY: The conclusion was that
9 a lot more work needs to be done on the subject.
10 That the emissions from boreal reservoirs appear
11 at this point to be less than fossil fuel options.
12 That is the conclusion.
13 MR. BEDFORD: The conclusion that I
14 recall is that boreal lake reservoirs have very
15 low emissions.
16 MR. MCCULLY: The meeting held in
17 Montreal sponsored by Hydro Quebec concluded that
18 a lot more work needs to be done on measuring the
19 emissions, and that I think certainly the
20 emissions from boreal reservoirs appear to be
21 considerably less than fossil fuel alternatives.
22 I think that the hydro power industry in terms of
23 Hydro Quebec, at least I'm familiar with their
24 figures, I think that they exaggerated how low the
25 impacts are. I think they have a very strong
2038
1 vested interest in trying to minimize the numbers.
2 So I think a little bit of a pinch of salt is
3 needed when dealing with Hydro Quebec numbers on
4 reservoir emissions, and international energy
5 agency numbers on reservoir emissions, because the
6 international energy agency numbers on hydro power
7 emissions come from Hydro Quebec, because the IEA,
8 International Energy Agency figures on hydro which
9 the hydro power industry frequently quotes are all
10 from IEA Implementing Agreement on Hydro Power,
11 which is a group of hydro power utilities.
12 MR. BEDFORD: Did the Commission not
13 suggest that the best way to compare greenhouse
14 gas emissions from different resources is a life
15 cycle analysis?
16 MR. MCCULLY: It did, yes.
17 MR. BEDFORD: One of the Commissioners
18 asked a question that I asked myself after looking
19 at 404 pages of a report, and that was so what is
20 the bottom line? What conclusions can I draw that
21 would assist me and be useful in understanding
22 whether or not what we call the Wuskwatim projects
23 are worthwhile? And the first conclusion or
24 message that I get from reading the 404 pages was
25 that those persons who are impacted by a dam
2039
1 project should benefit by it. Is that a fair
2 conclusion for me to have drawn?
3 MR. MCCULLY: I think that is a very
4 important conclusion of the report, and I would
5 very much agree with that conclusion.
6 MR. BEDFORD: I'm sure then that while
7 you have conceded that you haven't read what
8 amounts to about 10 feet of material that has been
9 filed here, but within that ten feet of material
10 there is plenty of information about how it is
11 intended that the Nisichawayasihk Cree Nation,
12 which will certainly be impacted by this project,
13 will benefit by it. That I assume you would say
14 is a good thing.
15 MR. MCCULLY: If the people benefit
16 from the project I think it is a good thing, yes.
17 MR. BEDFORD: The second conclusion
18 that I drew for myself from reading the 404 pages
19 is that it is important in the view of those who
20 prepared this World Commission report that
21 extensive studies and consultations take place
22 before any one proceeds to build a dam of any
23 nature or kind; is that a fair conclusion to have
24 drawn?
25 MR. MCCULLY: I think that is a rather
2040
1 obvious conclusion that the Commission came up
2 with and I agree with that.
3 MR. BEDFORD: Can I conclude that you
4 are reasonably impressed that we have ten feet of
5 studies detailing work done by a whole variety of
6 specialists who have considered this project from
7 any number of environmental and financial and
8 economic angles, and in addition within the ten
9 feet of material, is the record of all sorts of
10 consultations throughout Northern Manitoba with
11 communities who it is anticipated either will be
12 affected or will have some interest in the
13 project?
14 MR. MCCULLY: As I said, I haven't
15 read the ten feet of material so I can't comment
16 on its quality. But certainly it is a good thing
17 when studies are done and these projects should be
18 extensively studied. And there should be
19 extensive consultations, I think so. As I say, I
20 don't come here to make a for or against opinion
21 on this project under discussion. I'm coming
22 presenting what I feel are international standards
23 on dam construction which I would advocate be
24 followed in this case, and then it is up to I
25 guess the people of Manitoba and affected
2041
1 communities to decide whether they want the
2 project to go ahead.
3 MR. BEDFORD: And finally, I drew a
4 conclusion that in the minds of those who wrote
5 the report of the World Commission on Dams that it
6 is important when one builds dams to have
7 monitoring of the effects of having built those
8 dams. Is that fair conclusion to draw?
9 MR. MCCULLY: Again it is a very
10 important conclusion of the report, and I agree
11 with it.
12 MR. BEDFORD: Once again, while I know
13 you haven't read through the ten feet of material,
14 I'm sure you will be impressed to know that within
15 that material there are numerous references to the
16 sorts of monitoring that is proposed for the
17 Wuskwatim project. You are nodding your head.
18 That is all of the questions that I
19 have. Although I would like to note for the
20 record that I was pleased and proud to see your
21 reference to Manitoba Hydro having contributed to
22 this study, I'm informed that Manitoba Hydro
23 specifically contributed to the reservoir emission
24 study as opposed to the study of the Grand Coulee
25 dam. Thank you.
2042
1 MR. MCCULLY: Thank you.
2 THE CHAIRMAN: Ms. Matthews Lemieux.
3 MS. MATTHEWS LEMIEUX: My name is
4 Valerie Matthews Lemieux, and I represent the
5 Nisichawayasihk Cree Nation. And I just have a
6 couple of questions for you. As I understood your
7 presentation, you indicated that the focus of the
8 recommendations by the Commission was really on
9 decision making processes, is that right?
10 MR. MCCULLY: That is my
11 interpretation of the Commission, yes.
12 MS. MATTHEWS LEMIEUX: In terms of
13 preparing for your presentation today, I know you
14 reviewed some materials, you said you haven't
15 reviewed all of the materials. Were you provided
16 with a copy of Article 8 of the 1996 agreement
17 between the Nisichawayasihk Cree Nation, Manitoba
18 Hydro and the Governments of Manitoba and Canada?
19 MR. MCCULLY: I may have been referred
20 to it. I was referred to a lot of documents on
21 the web. As I say, the main document from the
22 advocate's perspective that I read was the
23 presentations on the first day, the transcript of
24 the first day of this hearing.
25 MS. MATTHEWS LEMIEUX: So you have not
2043
1 read then article 8 of the 1996 agreement, is that
2 right?
3 MR. MCCULLY: That's right.
4 MS. MATTHEWS LEMIEUX: Then you are
5 not really aware of what the specific decision
6 making processes are that have been followed with
7 respect to the Wuskwatim project, is that right?
8 MR. MCCULLY: Only as was explained in
9 the presentations on the first day.
10 MS. MATTHEWS LEMIEUX: Okay. Thank
11 you.
12 THE CHAIRMAN: Thank you.
13 Mr. Williams.
14 MR. WILLIAMS: Good afternoon, Mr.
15 McCully. I'm Byron Williams. Good afternoon
16 again, panel. I just want to follow up on a few
17 questions that my friend Mr. Bedford asked you in
18 terms of cost overruns in terms of major projects.
19 And if I understand your response to him, you were
20 indicating that the concerns in terms of cost
21 overruns are not restricted to water dams, they
22 extend as well to hydroelectric operations across
23 the world, is that correct, sir?
24 MR. MCCULLY: Yes.
25 MR. WILLIAMS: Can you give us some
2044
1 sense of what are the factors that may drive these
2 cost overruns in terms of hydroelectric
3 operations?
4 MR. MCCULLY: There is different
5 political and technical factors that -- the
6 political factors are that proponents want to give
7 the lowest possible cost because they want the
8 project to be approved. Because in the past all
9 large dams around the world, at least the bigger
10 large dams have been built by the public sector.
11 There hasn't been any accountability basically for
12 the builders of the dams to come in on budget, and
13 when you get, for example, the World Bank involved
14 in a project, they have been showing themselves
15 very willing to lend more money if cost overruns
16 happen. This is to the advantage of most people
17 involved in the project, the more money the dam
18 costs, the more money the contractors get
19 basically. And the more money there is -- in many
20 countries we know money gets skimmed off into
21 pockets where it shouldn't be, and the more money
22 the project costs, the more opportunity there is
23 for graft. So there is a lot of issues like that
24 which provide momentum for a deliberate
25 understatement of costs in the knowledge that,
2045
1 yes, costs are maybe going to go up later, but you
2 know, one, it's better to give a loose statement
3 because you are more likely to get the dam
4 approved because it looks better before
5 construction. Two, if the costs do go up it is a
6 good thing because there is more money for the
7 people involved.
8 Secondly there are technical reasons,
9 the main one which is geological reasons in that
10 it is very difficult to be able to assess the
11 exact geological nature of a site before you
12 actually start building on it. And even if you do
13 lots of test drillings, there still may be things
14 in terms of faults in the rocks and weak rock
15 structures that you don't know were there.
16 According to the World Bank data that is the
17 single most important technical reason for cost
18 overruns.
19 MR. WILLIAMS: In terms of the
20 technical problems or flaws, what kind of
21 recommendations are you aware of in terms of
22 reducing those or mitigating those?
23 MR. MCCULLY: I can't think of any
24 specific technical recommendations which the
25 Commission made. They may be there, I can't think
2046
1 of them. However, I think that the Commissioners
2 would have said, or the purpose of some of the
3 recommendations were that if you have a fully
4 transparent decision making process with all
5 documentation provided, there should be scope for
6 independent review of the cost estimates so that
7 hopefully there would be some independent
8 validation of how accurate the estimates were.
9 MR. WILLIAMS: In terms of building
10 hydroelectric dams, who is building them? I'm
11 taking it that it would be a fairly elite small
12 group of firms that are responsible for the
13 construction of large dams, would that be fair?
14 MR. MCCULLY: There is quite a small
15 number of firms that are involved in a big way in
16 the international a level. In terms of, for
17 example, equipment supply, there is actually a
18 shrinking number of firms, like in many other
19 sectors there has been a lot of consolidation in
20 the hydro power generation section. So there is
21 companies from Europe, Toshiba and Mitsubishi from
22 Japan, GE Hydro in Canada and the U.S. that are
23 the major suppliers. There is quite a small
24 number. In terms of civil works construction,
25 there is a small number of engineering firms that
2047
1 are involved at the international level, but there
2 are a lot of local contractors that are involved
3 in operating the bulldozers and piling up the
4 earth and so on.
5 MR. WILLIAMS: Now, somewhere during
6 your testimony today you mentioned a firm called
7 Acres International. Is that a Canadian firm?
8 MR. MCCULLY: Yes, based in Toronto --
9 Ontario.
10 MR. WILLIAMS: And what kind of
11 functions are you aware that Acres performs in
12 terms of this industry?
13 MR. MCCULLY: It doesn't do just dam
14 building, although it is a major part of what they
15 do. They do a very broad range of functions.
16 They do feasibility studies, they do environmental
17 impact assessment, they work as the engineering
18 consultant during construction, they do sort of
19 the whole suite of I guess engineering feasibility
20 and environmental impact studies. They do options
21 assessment studies whereby they look at assessing
22 the viability of different Hydro power options on
23 a river and so on.
24 MR. WILLIAMS: Now, you referenced a
25 study that Acres did in regard to the 60-mile pond
2048
1 in the Macong Delta or river. Who was that study
2 performed for?
3 MR. MCCULLY: It was performed for an
4 United Nations body called the Macong River
5 Commission. It was done partly by -- Acres were
6 partners. It was done by Acres and a French firm.
7 MR. WILLIAMS: Now in your comments, I
8 was perhaps reading too much into that, but were
9 you suggesting that Acres in terms of its
10 recommendations in terms of that project was
11 acting almost as an advocate in terms of the
12 merits of that particular project?
13 MR. MCCULLY: I don't think that I
14 referred to that, but I certainly think that there
15 was a study which actually we did a critique of
16 and we found it to be highly flawed in numerous
17 respects.
18 MR. WILLIAMS: And this was a study
19 conducted by Acres?
20 MR. MCCULLY: Acres and Company.
21 MR. WILLIAMS: And can you just give
22 me some of the concerns that you had with the work
23 performed by Acres in regard to that particular
24 study?
25 MR. MCCULLY: I reviewed this about
2049
1 ten years ago, but from my memory, one of the
2 major problems was that the conclusions in the
3 executive summary, the short executive summary
4 which is what we all know people mainly read, they
5 don't go back and read the however many linear
6 feet of studies that go into it. But the
7 conclusions in the executive summary were much
8 more pro hydro development than the information in
9 the supporting documents. So, for example, on
10 fish impacts, now you have to realize that fish
11 are extremely important in the Macong basin in
12 terms of livelihood, fish is the main source of
13 protein for people in the Macong basin.
14 60 million people there. An extremely important
15 issue. The conclusion of the executive summary
16 was the impacts -- basically the impacts are not
17 severe, impacts on fisheries. When you read the
18 actual basic documents done on fisheries written
19 by a different consultant it said that we don't
20 have enough evidence to assess any of these
21 impacts to fisheries, they are extremely complex,
22 we know there will be impacts, we can't possibly
23 predict what they will be. So there was certainly
24 basically some creative writing on the
25 conclusions, given what was actually in the
2050
1 supporting documentation.
2 MR. WILLIAMS: Now have you had the
3 opportunity to review the work of Acres in terms
4 of the other projects that they have been involved
5 in?
6 MR. MCCULLY: Yes, several places. We
7 have been following Acres involvement in the Usutu
8 where they were convicted of corruption, and have
9 been fined I think $1.2 million U.S., I would have
10 to check that figure, certainly of that order.
11 Acres are currently appealing the case, but they
12 have been claiming their innocence all along, but
13 they were actually convicted last year, they were
14 convicted of bribing the chief executive on the
15 Usutu Highlands Water Project.
16 We have also followed their
17 involvement in Uganda, where they did an options
18 assessment, electricity generation options
19 assessment which was supposed to look at all
20 electricity options, but basically just looked at
21 a range of different hydro power sites and came
22 out saying that basically hydro power was the only
23 viable option for Uganda, and very controversially
24 said that a specific option was the cheapest and
25 best option. This main study that they have done
2051
1 has been kept secret by the World Bank, despite
2 our efforts with the World Bank's ombudsman who
3 has ruled on our side, World Bank's inspection
4 panel has ruled on our side, but we haven't been
5 able to get ahold of this study.
6 A Norwegian development magazine did
7 get ahold of this study and they are claiming that
8 this study deliberately, or very curiously
9 underplays the costs of another hydro power option
10 which local people, environmentalists have said is
11 less destructive. It seems they have underplayed
12 the costs by 200 million. And now we think the
13 World Bank has possibly been embarrassed into
14 relooking at those numbers.
15 MR. WILLIAMS: I guess the lesson one
16 might draw from your comments in terms of Acres,
17 is the opinions and views of these consultants in
18 this small industry, from time to time we may want
19 to view them with a grain of salt or two, would
20 that be fair?
21 MR. MCCULLY: I spent a lot of the
22 last 11 years of my life reviewing various types
23 of environmental and economic feasibility studies
24 written by these types of consultants, and on the
25 whole my experience of them is that they are
2052
1 extremely biased and extremely poor quality. They
2 do not -- the major problem that I have is they
3 don't rely on the latest scientific data. They
4 don't look at actual experiences, they make
5 predictions based on sort of wishful thinking
6 rather than any real evaluation of past projects
7 and how they performed. And there is this, it
8 happens in all industries with all consultants,
9 there is a bias to deliver what the client wants.
10 It is always there. If they know that the client
11 is a government or utility that wants to build
12 hydro power projects, the chances are that the
13 consultant is going to say these hydro power
14 projects are viable and make rosy predictions
15 about how the impacts can be mitigated and so on.
16 It happens across the board. I haven't reviewed
17 in detail any Canadian documentation, but my
18 experience from countries where I have looked at
19 documentation, that is how the industry works.
20 MR. WILLIAMS: Thank you for your
21 comments, sir.
22 THE CHAIRMAN: Ms. Whelan Enns.
23 MS. WHELAN ENNS: Mr. McCully, I think
24 I was probably not the only person in the room to
25 hear your reference to energy planning and
2053
1 democratizing energy planning. Would you give us
2 a hypothetical description of what an energy
3 planning might include. For instance, we are
4 sitting in Manitoba now, but I'm thinking about
5 North America, so it is comparable, in Manitoba or
6 in a state of the midwest in the U.S. that has
7 hydro power?
8 MR. MCCULLY: Well, energy planning is
9 a big and complex subject, and there is a large
10 gulf between what currently happens in the U.S.
11 and the way I would maybe like to see things done.
12 Certainly planning should be done on an integrated
13 resource planning basis, which means that you look
14 at all of the options. You assess demand side
15 options and energy, in other words, energy
16 efficiency, energy conservation, as seriously or
17 in fact more seriously than you look at the new
18 supply options. And when you look at supply
19 options you look across the whole broad range of
20 options that may be available.
21 Other things, when you talk about
22 stages of hydro power, one of the things that I
23 think is very important now with the threat of
24 climate change is diversification away from hydro
25 power for hydro power dependent grids. We felt
2054
1 that in the western United States over the last 15
2 years at different times the problems of drought
3 affecting energy production is one of reasons for
4 the supposed energy crisis in California. There
5 is a lot of different reasons, but one of them was
6 poor snow pack over the Cascade mountains which
7 meant poor stream flow in the dams in the Pacific
8 northwest so they weren't able to export their
9 hydro power down to California. We see around the
10 world actually where you have places that are very
11 hydro power dependent, you have major problems
12 with drought. I think that problem is growing and
13 going to get worse. I think diversification into
14 other power sources, I would hope into the new
15 renewable resources, is very important.
16 MS. WHELAN ENNS: Going to your
17 reference to democratize energy planning, would
18 energy planning then, again in our hypothetical
19 jurisdictions, include making available to
20 affected communities and, for instance, if there
21 is a public utility involved, you know, a clear
22 and accurate picture in terms of the impacts to
23 date, the whole system that is in place, and then
24 what the options are to increase energy resource?
25 MR. MCCULLY: Well, you know, the
2055
1 conclusions from the World Commission on Dams that
2 I emphasized some of them were the ones relating
3 to existing projects, and I think it is extremely
4 important that when you have a proposal for a new
5 project and a process like this where a lot of
6 information can be brought out into the open, that
7 you use this as a place to start discussing --
8 hopefully, you would have started it earlier, but
9 if it hasn't started you can't do anything about
10 this, but use this as an opportunity to discuss
11 all of the impacts with the affected communities
12 and then discuss ways of lessening those impacts.
13 And that may include things like operating the
14 projects differently to generate less electricity
15 and then trying to deal with that bringing in more
16 energy efficiency elsewhere in the system. There
17 is a number of ways that could be dealt with.
18 But I think in terms of integrated
19 resource planning, especially when you look at the
20 World Commission on Dams recommendations that
21 looking at existing projects and doing proper
22 monitoring of existing projects and putting that
23 information out into the public domain is
24 extremely important.
25 MS. WHELAN ENNS: You have made a few
2056
1 references in your comments today and just now to
2 monitoring, both in terms of existing structure
3 and the whole of a hydro system. Should that
4 monitoring be independent of the utility?
5 MR. MCCULLY: It is essential that it
6 is. I mean, the utility may be involved in that
7 there can be joint monitoring between utility and
8 affected communities, but it cannot be under the
9 control of the utility for obvious reasons.
10 MS. WHELAN ENNS: I'm going to stop
11 for just a second and ask the chair, if I may, we
12 have a 2:30 call booked, and I'm asking someone to
13 watch the clock carefully.
14 THE CHAIRMAN: We are almost there.
15 MS. WHELAN ENNS: If I may, and again
16 I have not had the opportunity to read the World
17 Commission on Dams report, I read summaries, you
18 know, and other public information at the time,
19 and then bought a copy for our contractors and our
20 staff to have access to, and have spent some time
21 on the website. So my questions may clearly show
22 that I have not read the material.
23 Would you tell us whether the World
24 Commission on Dams conducted any exercise or
25 computation to put a value or cost on
2057
1 environmental impacts from dams worldwide or
2 regionally, and social impacts?
3 MR. MCCULLY: No, there was no attempt
4 to monetize what the overall impacts has been.
5 One of the background studies is on methods for
6 estimating monetary costs of environmental
7 impacts, but there was no attempt to actually
8 apply those methods, which would actually not be
9 really meaningful in a worldwide scale. It would
10 be too difficult.
11 MS. WHELAN ENNS: Thank you. In your
12 recently released report, 12 Reasons to Exclude
13 Large Hydro from Renewable Initiatives, I want to
14 ask a quick question about number 4. Your fourth
15 reason has to do with large hydro increasing
16 vulnerability to climate change. And we have
17 heard both in your first comments and your
18 presentation and also in questions, some comments
19 from you. I would like to know if you have any
20 recommendations or suggestions in terms of how we
21 might in Manitoba --
22 THE CHAIRMAN: We would like to
23 interrupt. I believe you are asking a question
24 which is not related to what was presented. It is
25 not part of what was presented.
2058
1 MS. WHELAN ENNS: I would certainly
2 rephrase it so that it is specific to his
3 presentation.
4 THE CHAIRMAN: Okay.
5 MS. WHELAN ENNS: My apologies. There
6 were questions put to you in respect to climate
7 change and emissions and reservoirs in the boreal.
8 What steps would you recommend so that we know
9 more of what we need to know in this regard in
10 terms of lakes that are reservoirs in our hydro
11 system in Manitoba and then, for instance, how to
12 know what difference there might be from the
13 Wuskwatim projects?
14 MR. MCCULLY: The issue of how do you
15 allow for the impacts of climate changes on the
16 projects, it is very difficult to do that because
17 we can't know exactly what the impacts are going
18 to be. We can do modeling which will give us an
19 idea what the models say, it won't necessarily
20 tell us what exactly is going to happen. But what
21 climate change does is increase the hydrological
22 risks. It means that sensitivity analysis of what
23 the different ranges of likely power outputs are
24 going to be, and therefore ranges of economic
25 returns, need to reflect severe drought scenarios.
2059
1 And I have to say I was very surprised in reading
2 the testimonies from the presentations from
3 Manitoba Hydro on the first day that they said
4 that their worst case scenario of low flows came
5 from historic droughts. But the whole point about
6 climate change is that it is change, it is not
7 climate same old same old. It is new climate, it
8 is different.
9 So you can't say because we had, or
10 that the drought we are in now is the worst we are
11 ever going to get. We need to look at the risks
12 that we are going to have worse droughts and more
13 frequent droughts. We may have more floods, there
14 may be more rainfall, maybe suddenly things are
15 going to change, maybe it is going to get a lot
16 wetter in Manitoba. We don't know that. But I
17 think when hundreds of millions of dollars are
18 going to get invested in a project that it is
19 responsible for the promoters of the project to
20 have a sensitivity analysis and look at different
21 hydrological outcomes outside of the range of what
22 has currently happened. Because what has happened
23 in the last 50 or 100 years is not what is going
24 to happen in the next 50 or 100 years, and anyone
25 who thinks it is I think is really deluding
2060
1 themselves. It is very difficult to know what is
2 going to happen, but we need to look at a wider
3 range of scenarios than are currently being looked
4 at.
5 MS. WHELAN ENNS: Thank you.
6 THE CHAIRMAN: Thank you.
7 MS. WHELAN ENNS: I have a couple of
8 more questions, but I'm assuming it is time. I'm
9 just double checking.
10 THE CHAIRMAN: It is 2:30.
11 MR. GREWAR: Mr. Chairman, before I
12 place the call to the other two witnesses, Senator
13 Anderson and Senator Kubly, I wanted to enter
14 Mr. McCully's overhead slide presentation, Report
15 of the World Commission on Dams, remarks and its
16 relevance in the Manitoba context as exhibit
17 CNF-1003.
18
19 (EXHIBIT CNF-1003: OVERHEAD SLIDE
20 PRESENTATION, REPORT OF THE WORLD
21 COMMISSION ON DAMS, REMARKS AND ITS
22 RELEVANCE IN THE MANITOBA CONTEXT)
23
24 THE CHAIRMAN: Thank you Mr. McCully.
25 To those who are wondering what is going on, we
2061
1 are lost in the woods here. We are waiting for a
2 telephone connection.
3 MR. GREWAR: I wonder if I could ask
4 you each to state your name for the record,
5 please?
6 SENATOR ANDERSON: I am Ellen
7 Anderson.
8 SENATOR KUBLY: I am Gary Kubly.
9 MR. GREWAR: I just ask if you are
10 aware that it is offence in our Province, in
11 Manitoba, to knowingly mislead this Commission?
12 SENATOR ANDERSON: Thank you for
13 letting us know that.
14 SENATOR KUBLY: I wasn't aware of
15 that, but that is fine. I am not planning TO
16 mislead anyone.
17 MR. GREWAR: And you promise to tell
18 only the truth in proceedings before this
19 Commission then?
20 SENATOR ANDERSON: Yes.
21 SENATOR KUBLY: Yes.
22 SENATOR ANDERSON: SWORN
23 SENATOR KUBLY: SWORN
24 MR. GREWAR: Thank you very much. I
25 am now going to turn you over to our chairman,
2062
1 Mr. Gerard Lecuyer.
2 THE CHAIRMAN: Good afternoon, Madam
3 and sir. I don't know which one of you will begin
4 the process, but I will let you decide. So we are
5 ready, we are listening, go ahead.
6 SENATOR ANDERSON: Maybe I will start.
7 I am Senator Ellen Anderson from St. Paul. And I
8 guess, as I understand it, what we had been asked
9 to do is to talk about, under Minnesota laws and
10 policies, what types of programs we have in place
11 to support and promote renewable energy. And I
12 think that is where I will focus my comments very
13 briefly, and we would be happy to take questions
14 if you have them. I don't know that either one of
15 us have very long prepared comments. We do not.
16 So I just wanted to start by saying
17 that in the Minnesota Senate, I chair the
18 committee called Jobs Energy and Community
19 Development, which does encompass the energy
20 committee in the State Senate.
21 Under Minnesota law we have what is
22 called the renewable energy objective, which is
23 not quite a renewable energy standard or a
24 renewable portfolio standard. What it is, it is a
25 requirement that our utilities in Minnesota make a
2063
1 good faith effort by the year 2015 to have
2 10 percent of their portfolio be produced from
3 renewable energy.
4 As of last year's energy bill, we have
5 a stricter requirement for Excel Energy. So they
6 actually -- which is our largest utility, as I am
7 sure you are aware -- they actually have a
8 requirement to produce, or acquire 10 percent of
9 their electricity from renewable sources by the
10 year 2015. However, there are some caveats in
11 that law that allow them to opt out of that if it
12 is too expensive or compromises reliability.
13 Right now it depends on how you count
14 it, but most people say that we are around
15 2 percent wind in our production of electricity.
16 That is about 2 percent of it comes from wind
17 right now, and other renewables are a very small
18 percent, less than a percent beyond that, or close
19 to that. I don't have the exact number here with
20 me.
21 Under Minnesota law we only consider
22 smaller Hydro projects that are under
23 60 megawatts -- if I read correctly, that is not
24 right. I think it might be 60, but, anyway, small
25 hydro projects are considered renewable energy.
2064
1 As you can see, Senator Kubly and I
2 rushed out a committee hearing to be here, so, as
3 I said, we don't have the opportunity to have
4 prepared statements.
5 So we do know, it has been estimated
6 that in Minnesota we could meet somewhere between
7 7 to 10 times our electricity needs with renewable
8 energy, because we do have an enormous wind
9 resource that has barely begun to be tapped. We
10 also have great, as Manitoba does, we have great
11 agricultural resources, so we know that we can
12 produce electricity using agricultural byproducts
13 as well.
14 My committee has recently heard
15 testimony about what is happening in northern
16 Europe, and I am very interested in trying to more
17 aggressively follow their example, where the
18 countries of Denmark, and Germany, and the
19 Netherlands have adopted aggressive policies to
20 promote renewable energy and are incorporating
21 somewhere between 25 and 50 percent of their
22 electricity from primarily wind, but also biomass
23 energy. And that is certainly very, very
24 achievable in the State of Minnesota.
25 Again, my vision or my goal would be
2065
1 to move our State towards energy independence, and
2 I think that over the long term it is very
3 feasible for our State to achieve energy
4 independence. It would provide enormous benefits
5 for our rural economy in particular, where a lot
6 of these fuel sources would come from. Currently
7 we import billions of dollars worth of fossil
8 fuels. And if we could reverse that trade
9 imbalance for our State, that would be very
10 beneficial to keep those dollars here in our
11 State's economy, as well as having benefits for
12 our environment and our lakes and our air quality.
13 Having said all of those things, I
14 guess I wouldn't be honest if I didn't say that,
15 you know, the coal plants and the nuclear plants
16 which make up the vast majority of our electricity
17 production in this State are widely supported.
18 And the point of view that Senator Kubly and I
19 might support, which is to move towards more
20 renewable energy and more energy independence, is
21 not necessarily adopted or endorsed by everyone in
22 the Minnesota Legislature or our Governor. We are
23 hoping for movement in that direction, but it is a
24 very slow process and there is still a lot of
25 support for traditional fossil fuel base load
2066
1 kinds of plants.
2 So as we try to meet our energy needs
3 in the next few years, there will be kind of a
4 debate about which types of sources are the best.
5 We will certainly be pushing forward more
6 aggressive policies to promote renewable energy to
7 try to meet those needs.
8 SENATOR KUBLY: I have heard that
9 about 70 percent of our citizens here in Minnesota
10 do support the move toward more and more
11 renewable. And I think that Senator Anderson
12 mentioned 10 percent renewables by 2015. I guess
13 I would like to pursue a little more ambitious
14 goal than that, and look at 20 percent by 2020 or,
15 you know, even move that number up a little bit in
16 the years. So it does seem to me that those are
17 goals that are really quite realistic and things
18 that could be achieved.
19 Now, in the part of the State that I
20 serve, I serve an area out along the western edge
21 of Minnesota, but we have, you know, a geologic
22 formation out there called Buffalo Ridge that runs
23 quite some distance. It runs nearly through my
24 entire district along the western edge of the
25 State, but it is actually quite a bit longer than
2067
1 that. And if we work to develop the whole
2 corridor there along the Buffalo Ridge, and some
3 of the geologic formations that surround it, it
4 does seem to me that, as Senator Anderson
5 indicated, we could become a net exporter of
6 electricity just based on the wind energy alone
7 that could be developed along the western ridge.
8 From my perspective as a rural
9 legislator here in the State of Minnesota, that
10 would be huge in terms of its economic development
11 potential for the rural parts of the State.
12 And like you, I am sure, there in the
13 rural parts of Manitoba, you are quite interested
14 in doing economic development there. You know, we
15 feel it is in our own best interest to develop
16 this kind of energy production potential for the
17 citizens of Minnesota. You know, we would like to
18 keep some of those dollars within the State and
19 generate that capacity there.
20 Now, I know that some of the opponents
21 of wind energy say that wind energy is not
22 reliable. The State of Minnesota's commerce
23 department has actually done a study of our area
24 of the State and feels that there is opportunity
25 for peak wind energy development in our part of
2068
1 the State because of the amount of time the wind
2 blows out there. It blows a fairly substantial
3 period of time.
4 I know that some of the utilities, I
5 think they have a tendency to downplay how much
6 wind energy is dependable and what percentage of
7 the time. You hear a lot of variables there, and
8 a lot of quotes from different sources that really
9 are not in agreement as to how dependable wind
10 energy is.
11 From the perspective of those of us
12 who serve the western regions of the State, we
13 kind of feel that we would like to see some pilot
14 projects out there that would run for a couple of
15 years, that would look at the possibility of using
16 some other agricultural products -- primarily soy
17 oil is one of those that we are looking at right
18 now. There is a glut of soy oil in the United
19 States, all across the country, and we would like
20 to see some of that used in diesel engines to keep
21 the supply of energy from our wind turbines a
22 steady supply, and look at ways that we can make
23 wind energy a part of the base load, and not just
24 part of the intermittent production of energy that
25 we have here within the State of Minnesota.
2069
1 So, from my perspective, I guess as a
2 rural legislator, I look at it in terms of the
3 number of jobs that could be created in the rural
4 parts of this State, and the number of dollars
5 that would flow toward those rural parts of the
6 State because of that wind energy generation.
7 You know, we have a report here from
8 Indiana that talks about, you know, 1500 jobs
9 being created just on the basis of a small portion
10 of the electrical energy production that could be
11 supplied from that region of the State, and that
12 it would create an impact on Minnesota's economy
13 in the neighborhood of $1 billion. That is a
14 billion with a B.
15 So I think there is a lot there that
16 we need to look at in terms of economic
17 development. Certainly the environmental aspects
18 of it are another piece that we would like to look
19 at. But both in the production of wind energy,
20 which is about as environmentally clean as
21 anything that you can do, and really even in the
22 burning of soy oil you don't have the kinds of
23 hydrocarbons being released in the atmosphere that
24 you get from regular diesel fuel. So from that
25 perspective, I think that Minnesota is looking at
2070
1 using more soy product in their diesel fuel too.
2 And we have some legislation on the board that
3 will change the fuel standards in Minnesota a
4 little bit as we move forward. And I think, you
5 know, as we go forward into the out years that we
6 would look at increasing that capacity somewhat as
7 well.
8 I think those are just some of the
9 comments that I would like to make. And I guess
10 Senator Anderson has made some of hers. If there
11 are some questions that your committee would like
12 to entertain there, we would be willing to respond
13 to those, if we can, or if we don't have any
14 information, we will simply tell you that as well.
15 THE CHAIRMAN: Thank you, Senators
16 Anderson and Kubly.
17 So I will open the floor to questions,
18 and I know some are already indicating that they
19 wish to ask you questions. I will ask you one to
20 begin with. What is the total energy need of the
21 State of Minnesota? How much of that do you now
22 produce from your own sources of energy?
23 SENATOR KUBLY: My guess would be
24 somewhere between 93 and 95,000 kilowatts. We
25 produce, I would guess, 2 and a half percent from
2071
1 renewable sources.
2 SENATOR ANDERSON: Sorry, I don't have
3 any numbers at the top of my head.
4 SENATOR KUBLY: That is just a rough
5 guess. I just looked at, you know, if
6 75,000 kilowatts, you know, is eight times the
7 State's potential, we would be somewhere in the
8 neighborhood of 93 to 95,000 kilowatts as being
9 the demand. So, you know, I don't know if I can
10 give you anything more specific than that.
11 THE CHAIRMAN: Now, I appreciate that,
12 but that doesn't sound correct. I am sure it is
13 more than 95,000 kilowatts but --
14 SENATOR ANDERSON: We could easily get
15 you that information. I know I have it in a file,
16 I just don't know that off the top of my head, the
17 number. We could easily get that to you.
18 THE CHAIRMAN: You have indicated that
19 you produce about 2 and a half percent of your own
20 renewable resources. The rest of your electricity
21 is produced from coal and nuclear energy, from
22 what I understood?
23 SENATOR ANDERSON: About 70 to
24 75 percent of the electricity comes from coal,
25 about roughly 20 percent or slightly under that is
2072
1 from nuclear.
2 THE CHAIRMAN: Okay. And are you
3 self-sufficient within your State or do you
4 import?
5 SENATOR ANDERSON: We import. We have
6 no natural coal sources or uranium deposits, so we
7 import all of that.
8 THE CHAIRMAN: Thank you. I will open
9 it to other members for questions -- Mr. Mayer, a
10 member of the panel.
11 MR. MAYER: Good afternoon. My
12 question is for Senator Anderson. You had
13 indicated that you have objectives for a minimum
14 amount of your power being produced by renewable
15 energy. And then you said, if I heard you
16 correctly, only small hydro is renewable energy.
17 Did you say that?
18 SENATOR ANDERSON: Yes, that's right.
19 I am going to grab the statute book to see if I
20 can give you the exact definition, but we do have
21 a statutory definition of what is considered
22 renewable to meet that objective.
23 You have to keep in mind that it is a
24 very political process to establish that
25 definition, and right now, after the energy bill
2073
1 last year, we include burning of municipal waste
2 to be considered renewable, and we narrowly
3 defeated an effort to define coal as renewable
4 energy. So, it is somewhat a political process to
5 make because those definitions are set by the
6 legislature, but for a number of years we have
7 had -- our definition of renewable does limit it
8 to small hydro projects.
9 MR. MAYER: Maybe my next question is
10 going to be really difficult to answer, because I
11 was going to ask you for the rationale as to why,
12 if hydro power is renewable, why it stops being
13 renewable when you produce more of it?
14 SENATOR ANDERSON: Well, I think that
15 is a good question, and I frankly don't know what
16 the legislative history of that definition is. So
17 I can't answer the question about what the
18 original reasoning was, but I guess my
19 understanding, my belief is that small hydro
20 projects are considered to have less of an
21 environmental impact on the surrounding landscape
22 and to the water, and so it is based on those that
23 have the less significant footprints. But I can't
24 give you more details than that about what -- why
25 that particular cut-off was arrived at.
2074
1 THE CHAIRMAN: Mr. Mayer.
2 MR. MAYER: I don't think there is
3 much sense in pursuing that much further. I was
4 going to wonder if the issue was efficiency. And
5 environmental damage, I would wonder why your
6 definition wouldn't include something like that,
7 as opposed to limiting it to the number of
8 megawatts that can be produced by any particular
9 hydroelectric facility. But I take it that that
10 too is probably part of the political balancing
11 that takes place in your legislatures?
12 SENATOR ANDERSON: I would say you are
13 right. I think asking for all of the statutes to
14 be completely consistent and rational is probably
15 expecting too much.
16 MR. MAYER: Thank you very much. I
17 have no further questions.
18 THE CHAIRMAN: We also understand
19 that.
20 SENATOR KUBLY: There is a new piece
21 in Minnesota statute -- well, fairly new -- it is
22 216C.051, subdivision 3 reads,
23 "To provide Minnesotans with adequate
24 electricity from in-State renewable
25 energy sources for the long term and
2075
1 export to adjacent States."
2 And then toward that end,
3 "The statute requires, among other
4 actions, an inventory of energy
5 resources used to generate all
6 electricity sold in Minnesota and an
7 analysis of the socio-economic and
8 environmental benefits and burdens
9 associated with each source."
10 THE CHAIRMAN: Thank you. I am
11 looking at my colleagues on the panel, or my
12 colleagues in the room here, and I see one coming
13 up to ask questions, and there may be some from
14 the proponents here as well.
15 THE CHAIRMAN: Mr. Byron Williams.
16 MR. WILLIAMS: Good afternoon,
17 Senators. My name is Byron Williams. I am an
18 attorney representing the Consumers Association of
19 Manitoba and the Manitoba Society of Seniors.
20 I just have a few questions relating
21 primarily to Excel Energy and the renewable energy
22 policy with regards to that. And my understanding
23 is that Excel is a private company, it is not
24 publicly owned; is that right?
25 SENATOR ANDERSON: It is an investor
2076
1 owned utility.
2 SENATOR KUBLY: It is an investor
3 owned utility, and our definitions may differ from
4 yours on what a public company is, you know, but
5 there is stock available for sale to the public.
6 SENATOR ANDERSON: But it is privately
7 owned.
8 MR. WILLIAMS: Thank you. You
9 answered the question better than I asked it and I
10 appreciate that.
11 You mentioned that Excel, unlike other
12 utilities in the State, has a 10 percent, I
13 underline the word "requirement" to produce
14 renewable energy. Is that right?
15 SENATOR ANDERSON: That's right.
16 MR. WILLIAMS: What were the two
17 limitations in terms of that requirement? You
18 mentioned two limitations.
19 SENATOR ANDERSON: Again, I apologize,
20 I don't have a copy of the language in front of me
21 of last year's energy bill. Roughly, I can
22 describe them as being a requirement, or an
23 exception to that would allow them to avoid that
24 requirement. I believe if they can't find a least
25 cost option that is renewable, or something to
2077
1 that effect, something that is based on cost --
2 and another piece of it, the other exception is
3 that if it compromises the reliability of the
4 entire system to incorporate too much renewable
5 energy, then that gives them an out.
6 All of these kinds of definitions are
7 usually subject to great deal of interpretation
8 and discussion at the Public Utilities Commission
9 before they are put into effect.
10 MR. WILLIAMS: Now, Senators, I want
11 to do a rare thing from the perspective of someone
12 who advocates on behalf of consumers, and I want
13 to just start from the perspective of a -- from
14 the Excel Energy. And I am assuming that one of
15 the reasons that you have to require Excel Energy
16 to -- or to mandate a certain amount of renewable
17 energy is that, and speaking solely from its
18 perspective, renewable energies such as wind might
19 be less economic than its more traditional sources
20 of power. Would that be fair?
21 SENATOR KUBLY: I am sure that is the
22 way Excel would view it.
23 SENATOR ANDERSON: We know that some
24 of the new bids that Excel has let out for
25 renewable electricity have had wind generation
2078
1 projects come in at the lowest price. And so we
2 know that new wind projects are actually cost
3 competitive, but in general that is, you know,
4 that is Excel's position, that it is more
5 expensive than other forms of energy and that it
6 is not -- they also take the position that it is
7 not a substitute for base load energy.
8 MR. WILLIAMS: Just moving on if we
9 could from Excel's perspective, if we could, and
10 staying on their perspective, from Excel's
11 perspective, leaving aside issues of reliability,
12 from this perspective there is a cost to it in
13 terms of using wind as opposed to its more
14 traditional alternatives. Would that be fair?
15 SENATOR KUBLY: It is difficult to
16 speak for Excel Energy. Neither Senator Anderson
17 nor myself works for them, and I guess I can't
18 really tell you what their perspective is. Maybe
19 Senator Anderson has heard them make some comments
20 but I have not.
21 SENATOR ANDERSON: I was going to say
22 the same thing. I think it would be fair to
23 really ask a representative from Excel to answer
24 those questions.
25 MR. WILLIAMS: Let me put it this way;
2079
1 assuming there is a cost to Excel, or to other
2 utilities, who absorbs those costs? Is it your
3 expectation that will be the investors of that
4 corporation?
5 SENATOR KUBLY: I am sure that Excel
6 Energy, like any other company doing business
7 here, is going to recover any excess cost that
8 they have from their ratepayers.
9 SENATOR ANDERSON: Just to back up, in
10 1994, when we had our first extensive debate here
11 about nuclear waste storage in the States, the
12 first wind mandate was passed into law, and that
13 was a specific mandate for Excel Energy that
14 required that they acquire 825 megawatts of wind
15 and 125 megawatts of biomass power. And it was
16 clear under the law that they were able to pass on
17 the costs of that, as of any other of their
18 electricity purchases, on to ratepayers.
19 MR. WILLIAMS: Thank you very much for
20 those answers. I just have two final ones, one to
21 Senator Anderson first. You indicated that kind
22 of your objective is 15 percent renewable energy,
23 as currently defined, by 2015. And I guess my
24 question to you is, why 15 percent versus
25 20 percent, or 25, or 35 percent? In your view,
2080
1 what are the limitations in terms of renewable
2 energy from your State's perspective?
3 SENATOR ANDERSON: I guess one last
4 piece I needed to answer, and that is I don't
5 believe that Excel has shown any rate increases to
6 ratepayers due to that wind mandate in 1994 that
7 was passed. Just for the record, I would like to
8 make that clear.
9 In terms of the percentage of -- the
10 number that we should use to hang our hats on, the
11 law that we have in place, the renewable energy
12 objective and the requirement for Excel,
13 10 percent by the year 2015, that is essentially a
14 product of political compromise. We passed in the
15 Senate -- the year we originally passed renewable
16 energy objectives in 2001, the Senate actually
17 passed renewable requirement that started out as
18 20 percent by the year 2020. That was my bill.
19 And we compromised a number of times, and then
20 compromised with the House and arrived at that
21 final number. And it whittled itself down. I
22 don't know exactly what the magic number is. What
23 I know is that 2 percent is way too low, and that
24 is where we are at right now, and I think that the
25 10 percent by 2015, as Senator Kubly said, is not
2081
1 as aggressive as I think our wind regime or the
2 competition level of the pricing would support. I
3 think we could do something more aggressive than
4 that.
5 Again, I would look to the experience
6 in Europe to see -- they have developed their wind
7 industry in the space of a few years time. And
8 while it may have been more costly than would be
9 acceptable to us, we have had a lot longer time to
10 develop it, and we also have far more wind
11 resource available here than they do in northern
12 Europe. So I think that the technological limits
13 have not yet been reached of what percent of wind
14 can be incorporated into a reliable electric
15 system. But I don't think that you even begin to
16 have that concern until you are, you know, well
17 above the 20 percent level.
18 SENATOR KUBLY: From my perspective, I
19 think there is growing public support for the
20 renewable development within the State of
21 Minnesota. Even though I kind of hate to admit it
22 at times, I think the legislature tends to follow
23 public support rather than lead. I would rather
24 see them lead, but the reality is that they tend
25 to follow. But with that growing public support
2082
1 out there, in my opinion, it is just a matter of
2 time before we have the kind of support within the
3 legislature to move ahead to a much more
4 aggressive goal than 10 percent by 2015.
5 MR. WILLIAMS: Just so I understand,
6 in your view, is it only politics and political
7 compromise that prevents the renewable energy from
8 assuming a greater percentage, or are there other
9 limitations that you are aware of?
10 SENATOR KUBLY: I think it is
11 primarily the political piece.
12 SENATOR ANDERSON: I would agree with
13 that as well. I think ten years ago we were in a
14 different position, where wind was really in its
15 infancy in Minnesota. Now the technology has
16 reached a point where it is cost competitive. And
17 again, we have examples of where the technology
18 has been incorporated at far higher levels than we
19 have here. So I don't think it is technological
20 or cost barriers at this point.
21 MR. WILLIAMS: So if I were betting on
22 the wind industry in Minnesota, I would have to be
23 betting on the political industry in Minnesota as
24 well; is that correct?
25 SENATOR KUBLY: I guess, once again, I
2083
1 think -- I will say it again -- I think the public
2 support is there, I think the public support is
3 growing, and I think the political will, will
4 follow.
5 SENATOR ANDERSON: It is just a matter
6 of plan and how long it will take. I think we
7 have been told that, for example, if we were to
8 have an aggressive renewable energy mandate, which
9 doesn't have to be a lot stronger than what we
10 have now, but it would have to be a little bit
11 stronger than what we have now, and it would have
12 to be mandatory and not just a good faith
13 objective -- we have been told that manufacturers
14 of wind turbines in Denmark would look to opening
15 a plant here in the State of Minnesota. So we
16 know that there is synergy between the public
17 policy and the private development, so it will
18 have -- you know, once we move forwards more
19 aggressively with those policies, I think the
20 development will quickly follow.
21 SENATOR KUBLY: There were some
22 incentives in the Federal energy bill for
23 renewables as well. I know that in my district I
24 have a company that makes the towers for the wind
25 turbines, and they are saying that if that Federal
2084
1 energy bill had passed that they would have put on
2 another 220 jobs immediately.
3 MR. WILLIAMS: Thank you, Senators, on
4 behalf of my clients. I greatly appreciate the
5 time that you have spent with us this afternoon.
6 SENATOR KUBLY: Say hi to Minister
7 Sale for me.
8 SENATOR ANDERSON: Thank you so much
9 for asking us.
10 THE CHAIRMAN: I am just looking
11 around to see if there are further questions.
12 Ms. Matthew Lemieux will ask questions.
13 MS. MATTHEWS LEMIEUX: Good afternoon
14 Senators. My name is Valerie Matthew Lemieux, and
15 I am the lawyer for the Nisichawaysihk Cree
16 Nation. I just have a couple of questions for
17 you.
18 I just want to try and help everybody
19 in the room here so we can see if we can clarify
20 the definition of 60 megawatts as it pertains to
21 renewables. As I understand it, and correct me if
22 I am wrong, but that definition only relates to
23 the renewable energy portfolio objectives. Is
24 that correct?
25 SENATOR ANDERSON: That is primarily
2085
1 what it is for, the renewable energy objectives,
2 but I don't know, there may be some other
3 cross-references in the statute, I can't say.
4 SENATOR KUBLY: We are under some time
5 constraints here too. We were told that this
6 would take a maximum of 30 minutes.
7 MS. MATTHEWS LEMIEUX: Well, I wasn't
8 the person that set any of those rules, so all I
9 can do is try and go ahead with the rest of my
10 questions, and if the Commission wants to cut me
11 off, I guess they will.
12 SENATOR ANDERSON: If we can be brief,
13 I know I have another meeting that I am supposed
14 to be at.
15 MS. MATTHEWS LEMIEUX: Let's just go
16 to a couple of other questions. You mentioned the
17 Department of Commerce. As I understand it, and
18 again for people here in the hearing room, the
19 Department of Commerce in Minnesota reviews bids
20 and makes recommendations to the Public Utilities
21 Commission; is that correct?
22 SENATOR ANDERSON: I don't know what
23 role commerce has.
24 SENATOR KUBLY: I don't either.
25 MS. MATTHEWS LEMIEUX: Okay. You know
2086
1 that they do, though, review the various energy --
2 energy resourcing that is required in Minnesota;
3 is that right?
4 SENATOR ANDERSON: I am sure they do.
5 I don't know what their legal involvement in the
6 process is.
7 MS. MATTHEWS LEMIEUX: Okay.
8 SENATOR KUBLY: It is vested in the
9 Public Utilities Commission.
10 MS. MATTHEWS LEMIEUX: You were, of
11 course, chairing a committee meeting last Friday
12 where members of the Department of Commerce
13 attended that committee meeting and indicated very
14 clearly that hydro imports from Manitoba are not
15 in competition with wind. Is that correct?
16 SENATOR ANDERSON: That was his
17 opinion, but we don't agree with that.
18 MS. MATTHEWS LEMIEUX: You may not
19 agree, but that was the Department of Commerce's
20 opinion; correct?
21 SENATOR ANDERSON: Edward Garvey, he
22 said something to that effect, I don't remember
23 his exact words to that effect, but, yes, he
24 indicated that he didn't believe they would
25 jeopardize our development of renewable energy.
2087
1 He also indicated that his view of what would be
2 considered progress in developing renewable energy
3 was not something that I would consider progress.
4 MS. MATTHEWS LEMIEUX: He also
5 indicated at that same meeting last week that
6 Minnesota needs hydro power from Manitoba and will
7 continue to need hydro power from Manitoba to meet
8 Minnesota's energy needs; correct?
9 SENATOR KUBLY: I believe he did.
10 MS. MATTHEWS LEMIEUX: Thank you. I
11 have no other questions.
12 SENATOR ANDERSON: Let me just add to
13 that, I think he was talking about future energy
14 needs. He may have said that, yes, I don't know
15 exactly. But, again, I would have a difference of
16 opinion about whether that is definite or not, it
17 is a matter of opinion.
18 SENATOR KUBLY: That is his opinion
19 and ours is different.
20 MS. MATTHEWS LEMIEUX: Just to clarify
21 also that, again, in terms of your purpose in
22 agreeing to participate in our proceedings here,
23 was to be able to describe your views about
24 renewable energy and your purpose is not to speak
25 for or against the project that is under
2088
1 consideration by the Commission; right?
2 SENATOR KUBLY: My purpose in agreeing
3 to visit with you was to simply talk about the
4 economic impacts that I think the development of
5 renewable energy within Minnesota would have on
6 Minnesota's own economy. And I think there is
7 significant impact that could be developed in that
8 area.
9 SENATOR ANDERSON: I would agree with
10 Senator Kubly, that is my purpose as well.
11 MS. MATTHEWS LEMIEUX: And Senator
12 Anderson, you did state on the record last Friday,
13 though, that your purpose was not to speak out
14 against the Wuskwatim project; right?
15 SENATOR ANDERSON: Yes, I said I was
16 not asked to do that in this telephone call and I
17 am not intending to do so. At the same time, when
18 I answered your question, I want to be clear that
19 I don't necessarily agree that we have to, that we
20 are reliant on imports from Manitoba Hydro for our
21 future, to meet our future energy needs, but I am
22 not speaking in particular to this project. That
23 is not my intention.
24 THE CHAIRMAN: Thank you. Mr. Bedford
25 will ask you questions.
2089
1 MR. BEDFORD: Good afternoon,
2 Senators, my name is Doug Bedford.
3 SENATOR KUBLY: We have to get on our
4 other appointments. We appreciate the fact
5 that -- we would be more than willing to visit
6 with you again, but we both have time constraints
7 here and our next appointments are awaiting.
8 SENATOR ANDERSON: Thank you so much
9 for the opportunity.
10 THE CHAIRMAN: Thank you.
11 SENATOR KUBLY: Goodbye for now.
12 MR. GREWAR: Mr. Chairman, I have been
13 advised by Ms. Whelan Enns that it would probably
14 not be difficult to reconnect with the two
15 Senators at a later time. It is just that there
16 was a limited time today. So I am just offering
17 that as a comment from Canadian Nature Federation
18 to facilitate further questioning by Manitoba
19 Hydro.
20 THE CHAIRMAN: Thank you, Mr. Grewar.
21 The panel will take that into consideration. We
22 will let you know.
23 I think that we have reached a time
24 where we can take a small break.
25
2090
1 (PROCEEDINGS RECESSED AT 3:10 P.M. AND
2 RECONVENED AT 3:20 P.M.)
3
4 THE CHAIRMAN: All right, Mrs. Whelan,
5 you have the opportunity to continue the redirect
6 with Mr. McCully.
7 MS. WHELAN ENNS: Thank you to the
8 Chair.
9 Mr. McCully, did the World Commission
10 on dams review or assess the impacts or
11 transmission systems?
12 MR. McCULLY: In the supporting
13 thematic review on environmental impacts, there
14 was some discussion on transmission systems.
15 There are also maybe -- there is another thermatic
16 review on environmental impact assessments. I
17 would imagine that they discuss it there, but I
18 don't remember.
19 In terms of what they say in the
20 actual report on environmental assessment, they
21 said there should be an assessment of all
22 associated infrastructures, so clearly that
23 includes the transmission lines.
24 MS. WHELAN ENNS: In the earlier
25 questions from -- and I am not sure whether it was
2091
1 Manitoba Hydro or NCN, you were asked questions in
2 respect to communities impacted, benefiting from
3 the development.
4 Does that also apply then to
5 communities impacted from transmission lines,
6 benefiting from the development?
7 MR. McCULLY: Yes, it shouldn't --
8 this has been a major problem with dam projects,
9 in the past and currently, that people affected by
10 ancillary infrastructure often are treated
11 differently than those, say, displaced by the
12 reservoir.
13 So, the commission recommends that
14 people -- but they talk about the rights and risks
15 approach. Basically, everybody's rights who are
16 at risk with the project should be dealt with as
17 affected stakeholders and should be among those to
18 benefit from it.
19 MS. WHELAN ENNS: Thank you. There
20 was also a question again, which I don't think I
21 can fully paraphrase not being a lawyer. But,
22 there were questions to you in respect to
23 consultations. Again, consultations with affected
24 communities.
25 Are you an expert on the requirements
2092
1 in Canada for consultations with Aboriginal
2 people?
3 MR. McCULLY: No.
4 MS. WHELAN ENNS: Are you
5 knowledgeable about the details that the
6 proponents -- the details of the proponents'
7 consultations, specifically with the people of
8 Nelson House First Nation?
9 MR. McCULLY: No.
10 MS. WHELAN ENNS: Have you at any time
11 been prepared for questions in respect to what I
12 refer to as section 35, consultations with
13 Aboriginal people? This is a reference to our
14 constitution in Canada.
15 MR. McCULLY: No.
16 MS. WHELAN ENNS: And have you had any
17 reason in the past to be expected to know about
18 section 9a consultations? This is a reference to
19 the Northern Flood Agreement in Manitoba and the
20 nations affected by flooding.
21 MR. McCULLY: No.
22 MS. WHELAN ENNS: Thank you.
23 THE CHAIRMAN: No further questions?
24 MS. WHELAN ENNS: Thank you very much.
25 THE CHAIRMAN: Thank you.
2093
1 I now call upon Mr. Rudnicki.
2 MR. GREWAR: Mr. Rudnicki --
3 THE CHAIRMAN: Mr. Rudnicki, would you
4 introduce yourself and Mr. Grewar will proceed to
5 swear you in.
6 MR. RUDNICKI: Mr. Chair, and members
7 of the Clean Environment Commission, my name is
8 Timothy Rudnicki. I am an attorney and Government
9 Affairs advocate that works on energy,
10 environmental issues and natural resource issues.
11
12 (TIMOTHY J. RUDNICKI: SWORN)
13
14 MR. RUDNICKI: Thank you for allowing
15 me to appear before this commission. I understand
16 you still do still have a full schedule and many
17 more presenters, so I will keep my remarks brief
18 and limit them to three points.
19 The feasibility linchpin, as I will
20 call it, for the proposed Wuskwatim generation
21 project is, as I understand it here, is ultimately
22 the U.S. export market. In some measure then the
23 commission's challenge may include the need to
24 build a bridge -- a cross-border bridge to fill
25 information gaps. I think we may have heard some
2094
1 of them outlined just a few moments ago from
2 Senators Kubly and Anderson. Given what is at
3 stake on both sides of border, I will do my best
4 to help fill some of those gaps.
5 Depending on which U.S. electricity
6 market scenario you work with, you get a different
7 picture of the role local renewable energy sources
8 can play and do play in the Midwest energy future.
9 One scenario is based on business as usual. The
10 other is a current plan. It is an evolving plan
11 for the U.S. Heartland and it includes Minnesota.
12 Based on my review of the
13 justification need for an alternative to the
14 Wuskwatim project documentation, it seems the
15 project proponents rely upon what I would call
16 again as a business as usual scenario.
17 Under that scenario, they conclude
18 that the Wuskwatim project will displace fossil
19 fuel energy sources in the export market. The
20 business as usual for Manitoba Hydro reflects some
21 U.S. energy and environmental policies. It also
22 acknowledges some changes taking place in the U.S.
23 Heartland and it also acknowledges some renewable
24 energy sources that are part of the mix, but it
25 fails to give the complete picture.
2095
1 The analysis must go a step further
2 because the business as usual scenario glosses
3 over the significant role individual states can
4 play and are playing in efforts to further
5 increase the use of local homegrown renewables to
6 generate electricity and decrease carbon dioxide
7 emissions. This alternative energy scenario is at
8 work and it must be acknowledged and it takes us
9 along a path line with more local, renewable
10 energy resources.
11 So, at this point, to help quickly
12 fill some of those information gaps, what I would
13 like to do is review some of the elements that are
14 in a business as usual scenario and then we can
15 talk about some of the alternative energy plans
16 and the role wind energy is playing in Minnesota.
17 I will build upon some of the points Senator Kubly
18 and Senator Anderson made.
19 My focus is on Minnesota rather than
20 other U.S. markets for a couple of reasons. The
21 project proponents' response to interrogatories
22 provide little or no new information about export;
23 market customers, new markets or whether any new
24 power purchase agreements are being negotiated in
25 anticipation of Wuskwatim project. But, one of
2096
1 Manitoba Hydro's largest customers is Excel Energy
2 and Excel Energy serves the Minnesota market.
3 Another reason that I am going to
4 focus on the Minnesota picture is that Minnesota
5 has an abundant supply, if you want to think it
6 that way, of a environmentally benign energy
7 source and that is wind. It appears Minnesota
8 could even become the electricity exporter at some
9 future time.
10 The traditional business as usual
11 electricity scenario is based on a portfolio of
12 standard electricity generating sources. They
13 include coal, nuclear, gas and oil, hydro and some
14 existing renewables.
15 According to "Repowering the Midwest",
16 a report by the Environmental Law & Policy Center
17 in Chicago, the business as usual scenario
18 includes a slight increase in the electricity from
19 Hydro beyond 2010, with a gradual decline some
20 time before 2020. The report doesn't distinguish
21 domestic hydro from imported hydro, but the rise
22 and drop for hydro over a 20-year time line is
23 consistent with the Wuskwatim project proponents'
24 export plan.
25 Under the business as usual scenario,
2097
1 industry forecast -- and I think I got myself
2 ahead of the slide here. I want to share with you
3 the relationship between carbon dioxide emissions
4 and the role of various factors in the equation,
5 such as nuclear power plants and coal plants play.
6 So, using the industry forecasts, the
7 assumption is that natural gas will play a greater
8 role than power plants. It is going to be the
9 primary source of new generation and natural gas
10 plants for meeting future load growth.
11 The existing power plants or the
12 existing coal plants capacity factor based on this
13 business as usual scenario is expected to increase
14 and it is expected to increase as much as 71
15 percent because the existing plants that have not
16 been retired will operate and there will be more
17 new load growth.
18 So, while these older coal plants may
19 be retired, the net impact could be an increase in
20 coal generation over the next 20 years. Thus,
21 under that scenario, the business as usual
22 scenario, where fossil fuels dominate the
23 electricity generation, the Wuskwatim project
24 proponents could reasonably conclude hydro would
25 compete in the market with and potentially
2098
1 displace the use of some fossil fuels, like gas or
2 coal. But, what happens in times of drought?
3 Could Manitoba Hydro be forced to buy electricity
4 from coal fired power plants?
5 I think one other point that I should
6 make clear at this stage is that I am basing a lot
7 of my factual background information that involves
8 a lot of research on the report "Repowering the
9 Midwest" from the Environmental Law & Policy
10 Center in Chicago.
11 Quite frankly, the resources provided
12 to me to investigate this would not have allowed
13 new studies or any type of additional research,
14 but there had been and there are now, many reports
15 like "Repowering the Midwest" already on the
16 shelf. They answer many questions looking 10, 15
17 and 20 years into the future. If you reference --
18 the website is up on the screen.
19 I think what else is significant,
20 while this may not be a ten-foot long document,
21 there are at least 100 references and they
22 literally do go from A to almost Z.
23 The combustion of the fossil fuels,
24 including the release of more carbon dioxide, with
25 a combination of new low growth in the Midwest,
2099
1 nuclear units being retired and more natural gas
2 generation coming on-line, carbon dioxide
3 emissions are expected to climb. In fact,
4 according to, once again, the ELPC report, the
5 Midwest carbon dioxide emissions under the
6 business as usual scenario could likely rise from
7 about 557 million tons in 2000 to about 726
8 million by 2020.
9 Whether the Wuskwatim generation
10 project and the electricity imports from it could
11 be a solution to the looming carbon dioxide
12 problem in Minnesota and the Midwest is still an
13 open question. That is especially the case, given
14 the availability of abundant wind energy resources
15 in the Midwest and in Minnesota.
16 Now, interestingly, the Environmental
17 Law & Policy Center takes the position that even
18 with this increase in carbon dioxide, domestic
19 Hydro, at least, is not considered part of the
20 mix. They don't consider that a solution to the
21 problem. They don't consider that as a renewable
22 energy resource for a couple of reasons.
23 At least within the states, problems
24 with certain size hydro operations are well-known
25 and Patrick McCully outlined lots of issues about
2100
1 dams and hydro operations generally.
2 Hydro was ruled out as a new source of
3 domestic energy due to limits on its developmental
4 potential in the states and because there are a
5 number of regulations that protect rivers.
6 Further, it is understood and it is
7 viewed that hydro power does impose environmental
8 and other costs on society. The ELPC takes the
9 position that hydro power should also be excluded
10 from emission allowances and carbon dioxide caps
11 and trades policies.
12 It appears the project proponents
13 overlooked another possibility under the business
14 as usual scenario and that is, if the electricity
15 demand levels off due to demand-side management,
16 greater efficiency and operation of coal plants
17 can actually be ramped down. In that case, wind
18 energy can even supply the intermediate needs for
19 electricity generation.
20 So, just a recap on the screen,
21 business as usual.
22 I think another important point to
23 share with you is that there is concern about
24 giving undue emphasis to Hydro and providing it
25 with certain incentives because it is viewed as a
2101
1 mature industry and that is contrasted with local
2 renewables that are in some cases in the
3 developmental stage and in other cases are ramping
4 up.
5 I am going to just leave a little
6 factoid here. If more efficient use of
7 electricity were to take place in, let's say, the
8 Midwest, once again the Environmental Law & Policy
9 Center did some calculations. They found out that
10 we are sitting on a potential 291 billion kilowatt
11 hours. As I understand it, that breaks down into
12 the equivalent of about 100 coal plants, each at
13 about 500 megawatts. So, there is incredible
14 potential for energy savings in the Midwest.
15 With respect to Minnesota, the
16 Department of Commerce has done a number of energy
17 analyses and studies. Their conclusion was there
18 is nearly 1100 megawatts in energy efficiency
19 capability alone within Minnesota.
20 Wind, again, viewed as an option as
21 opposed to fossil fuel. I guess that takes us to
22 our alternative.
23 We have been talking about business as
24 usual. In stark contrast to business as usual
25 electricity scenario, which includes existing
2102
1 imports of hydroelectricity from Manitoba, is this
2 alternative scenario and is aimed at literally
3 repowering Minnesota and the Midwest. The focus
4 under this scenario is to use even more efficiency
5 and local homegrown renewables as energy sources
6 to generate electricity.
7 Now, I will go up to another site and
8 that is from the Regional Economics Applications
9 Laboratory. This is out of the University of
10 Illinois. What they have done is a study, an
11 examination of ten different states and asked
12 questions about -- under various scenarios, what
13 type of annual, economic output increase can be
14 experienced under increased energy efficiency and
15 what type of job growth can take place?
16 As you can see, the numbers are rather
17 staggering. At 2010, it is expected to be an $11
18 billion boost and by 2020, $19.4 billion. That's
19 an increase in annual economic output.
20 The job growth, again is rather
21 staggering. From 120,000 to 209,000, going from
22 2010 to 2020.
23 So, this actually underscores some of
24 the points that Senator Kubly made about job
25 growth and economic potential associated with
2103
1 using local homegrown renewables.
2 I am going to quickly run through five
3 elements of an alternative energy scenario.
4 Again, I am borrowing from the Environmental Law &
5 Policy Center. The elements include aggressive
6 implementation of modern cost-effective energy,
7 efficiency technologies, including the newest as
8 well as the tried and true approaches.
9 The development of an implementation
10 of new, clean, renewable energy technologies,
11 including wind, biomass and solar photovoltaics.
12 The development and implementation of
13 the use of efficient natural gas systems,
14 particularly with respect to combined heat and
15 power, district energy systems and possibly fuel
16 cells.
17 The retiring of older, less efficient
18 coal plants and especially those that are high
19 polluters. And applying sustainable development
20 strategies to aggressively link the environmental
21 components with the policy components and the
22 practical implications for jobs and local and
23 regional economic development.
24 A few of these elements are already in
25 Minnesota law as Senator Anderson pointed out
2104
1 earlier.
2 With respect to the clean renewable
3 energy element taken from this aggressive
4 strategy, Minnesota certainly does have vast
5 renewable energy sources that does include wind.
6 Another important point is that a lot
7 of this information is contained in the Minnesota
8 Energy Planning Report 2001. In that report from
9 the Department of Commerce, it was found through
10 many years of doing anemometer readings and
11 compiling data from a variety of wind researchers,
12 that there are hundreds of thousands of megawatts
13 of wind power in Minnesota. If you look at
14 Minnesota and Iowa, there is about 500,000
15 megawatts. But, the American Wind Energy
16 Association takes a conservative approach and, in
17 fact, for Minnesota, in particular, their numbers
18 show 75,000 megawatts of realizable wind power.
19 Now, what does that mean in terms of
20 Minnesota's demand versus use? I think one of the
21 commissioner's asked that question earlier.
22 It is my understanding, based on the
23 Department of Commerce report, that Minnesota has
24 a demand of roughly ten to 11,000 megawatts. So,
25 as you can see with some quick math here, the wind
2105
1 potential is nearly eight times what Minnesota's
2 electricity demand is to power homes and offices
3 and farms and businesses.
4 The ELPC describes the significant
5 potential just south of the border like this:
6 "However it is measured, the wind
7 energy potential in the Midwestern
8 States is enormous. Even after
9 excluding environmentally sensitive
10 areas and considering only class 3 and
11 better resource areas, several states
12 could theoretically supply all of
13 their electricity demand with
14 indigenous wind resources and still
15 have plenty for export. In addition,
16 many wind areas are quite close to
17 existing transmission lines, making it
18 relatively inexpensive to connect them
19 to the grid."
20 So, what is the point in sharing all
21 of this information with you? Well, there are two
22 things. The proponents have argued electricity
23 from the proposed Wuskwatim project could displace
24 the use of fossil fuel to generate electricity and
25 they have argued that renewable energy sources are
2106
1 out at the margins of being able to meet
2 electricity needs in export markets.
3 I submit to you based on reports and
4 studies that are already on the shelf and have
5 been for a number of years, without doing any
6 further additional in-depth research, that one,
7 subsidized hydroelectricity may be displacing
8 local renewable energy sources; and two, local
9 wind resources -- at least in the Minnesota
10 market -- far exceed the potential generating
11 capacity, assuming adequate water flow for the
12 proposed Wuskwatim project.
13 Furthermore, any economic advantage,
14 that is either direct or indirectly given to
15 mature hydro, actually gives hydro a greater
16 advantage, not over fossil fuels under the
17 business as usual energy scenario, but over new
18 and emerging local renewable energy sources.
19 Perhaps to more fully realize the full
20 advantage of the economic and environmental
21 benefits from -- I will just single out wind
22 energy in the local markets -- we should figure
23 out how to address hidden subsidies for energy
24 sources under the business as usual energy
25 scenario. A wide range of energy sources,
2107
1 including hydro, impose costs on the environment
2 and human health.
3 Other forms of direct and indirect
4 subsidies for traditional energy sources include
5 tax breaks, research and development and
6 protection from accident liability.
7 It is only recently that new renewable
8 energy sources have begun to receive very modest
9 support for research and development and
10 production tax credits.
11 To give you a little better
12 perspective on that, I will give a little context
13 from U.S. government subsidies and for traditional
14 business as usual energy sources. If we look at a
15 continuum from 1943 to 1999, nearly $145 billion
16 has been dedicated as subsidies and of that $5
17 billion essentially is set aside for renewable
18 technologies. Pretty lopsided set of subsidies.
19 A more recent look at fiscal '96,
20 shows $1300 million for traditional energy sources
21 compared with 270 million for all renewable energy
22 technologies.
23 Clearly this commission and the
24 government it reports to needs independent
25 information regarding the Midwest, U.S. energy
2108
1 market, energy sources in the future of new local
2 renewable energy sources and the role those energy
3 sources can play in meeting the need for
4 electricity while lowering carbon dioxide
5 emissions.
6 What I would like to do is briefly
7 give a little bit of statutory framework. I am
8 not going to go through subsections of subsections
9 of statutes, but I would like to share with you
10 the perspective on how Minnesota is moving about,
11 its role as being a leader in terms of energy
12 efficiency and use of local renewables and how
13 that translates into the regulatory process and
14 decisions about what energy sources are viewed in
15 power purchase agreements.
16 There is significant legislation in
17 place to move Minnesota down the path of using
18 even more homegrown local renewables. I think
19 Senator Kubly cited this. It is a Minnesota
20 statute, 216C.051 Subdivision 3. I translate that
21 into paving the way into more renewables because
22 it reads like this:
23 "'To provide Minnesotans with adequate
24 electricity from in-state renewable
25 energy sources for the long term and
2109
1 export to adjacent states.'
2 Toward that end, Minnesota Statute
3 requires among other actions, 'an
4 inventory of energy resources used to
5 generate all electricity sold in
6 Minnesota and an analysis of the
7 social, economic, and environmental
8 benefits and burdens associated with
9 each energy resource.'"
10 Now, one issue that may be relevant
11 here is whether hydro is considered a renewable
12 energy source, at least in the Minnesota market.
13 We heard some comments about that from witnesses
14 earlier. Project proponents indicate that they
15 are favourable tariffs and access to certain
16 markets, either based on precedent in that market,
17 such as Manitoba Hydro's dealings with Excel
18 Energy, or some other recent changes in the law,
19 which I, again, believe Senator Anderson started
20 to reference.
21 To clarify how all of this procedural
22 machination works for looking at energy sources, I
23 think we have to read a couple of statutes side by
24 side.
25 While large centralized energy
2110
1 facilities dominate the businesses as usual
2 electricity scenario, Minnesota continues to move
3 down the local renewable path. Toward this end,
4 if and when the need should arise to refurbish or
5 build more generating capacity in the state, the
6 agency responsible for the governing regulatory
7 process must ensure many factors have been
8 considered before approving what is called a
9 "certificate of need" in Minnesota.
10 Again, there is another statutory
11 reference: 216B.243. It requires specifically an
12 assessment of need and includes an evaluation of
13 accuracy of demand forecasts, relationship to the
14 state energy policy report, increased efficiency,
15 and a combination of energy conservation
16 improvement. So, there is a wholistic look at
17 Minnesota's energy picture before an approval is
18 given to any of these certificates.
19 The governing regulatory body is
20 charged also with ensuring the applicant desiring
21 to refurbish or build a new generating plant has
22 explored the possibility of generating power by
23 means of renewable energy.
24 If we turn to statute 216B.243
25 subdivision 3a -- and I won't go any further than
2111
1 that, hydro is considered renewable, along with
2 wind, solar, geothermal and the use of trees and
3 vegetation.
4 But, what is important to know about
5 this particular statute is that another
6 subdivision makes clear the issues relate to
7 certificates of need for and with respect to
8 citing and constructing large power plants in
9 Minnesota. It is not about construction elsewhere
10 and it is not about imports of hydroelectricity
11 into the Minnesota market.
12 One other important reference for you
13 here is 216B.2422. That statute underscores the
14 point about renewable energy facilities in
15 Minnesota. It is not just about where the
16 electrons are generated.
17 "The commission shall not approve a
18 new or refurbished non-renewable
19 resource facility in an integrated
20 resource plan or a certificate of
21 need, nor shall the commission allow
22 rate recovery for such a non-renewable
23 energy facility, unless the utility
24 has demonstrated that a renewable
25 energy facility is not in the public
2112
1 interest."
2 Some more guidance to the regulatory
3 body, but the statute is again is very clear. It
4 is about an energy facility. It is about the
5 jurisdiction or oversight of the Manitoba Public
6 Utilities commission and it is about renewable
7 energy in Minnesota.
8 Let's assume that hydro would clear a
9 number of regulatory thresholds, renewable --
10 Minnesota's renewable energy objectives provide
11 additional guidance as what is considered
12 renewable hydro. If we go to statute 216B.1691,
13 there is a subdivision there that defines energy
14 technologies, including hydro and the language
15 specifically states:
16 "Hydroelectric with a capacity less
17 than 60 megawatts."
18 Well, if hydro could pass the
19 renewable definition threshold under the
20 certificate of need process, which specifically
21 goes to Minnesota energy facilities, it still must
22 pass muster under Minnesota statute 216B.2422, and
23 that statute explicitly requires the examination
24 of the social and environmental cost associated
25 with energy resources even beyond the Minnesota
2113
1 border.
2 Now, if Hydro power could enjoy the
3 benefits under the Minnesota renewable energy
4 definition, Hydro power should expect to be
5 scrutinized under all other corresponding
6 environmental statutes and regulations, including
7 the assessment of all externalized social and
8 environmental costs associated with the energy
9 source.
10 On a related matter, I want to share
11 with you, at least as of Friday afternoon, the one
12 billion dollar U.S. power purchase agreement
13 between Manitoba Hydro, that was supposedly
14 concluded in August 2002, is under review by an
15 intermediate court, the Minnesota Court of
16 Appeals. A number of regulatory issues
17 surrounding the energy resource selection and the
18 approval process are still under review by that
19 court. I should give you a little more slide
20 here.
21 While the Wuskwatim project proponents could try
22 to shoehorn generation from the proposed project
23 and supporting hydro system into the Minnesota
24 market, or otherwise rely on business as usual
25 based on formal dealings with Northern States
2114
1 Power Company, now Excel Energy, there is a new
2 reality in Minnesota. In Minnesota there is a
3 commitment to pursing a new path, a new energy
4 path, and that new energy path once again includes
5 using local renewable energy resources. There is
6 a new and keener awareness about energy resources
7 and their impact on ecosystems and human health.
8 The Minnesota externalities law that I
9 referenced moments ago is just one example as it
10 requires the application of social and
11 environmental costs to energy and resource
12 selection decisions.
13 One need only turn to the Minnesota
14 Energy Planning Report 2001 to get a sense for the
15 evolving electricity market in Minnesota, as well
16 as interrelationships with economic and
17 environmental factors. That report from the
18 Minnesota Department of Commerce tackles some
19 difficult issues involving Manitoba Hydro. For
20 instance, the report states:
21 "Many issues have been raised as to
22 environmental and socioeconomic issues
23 stemming from Manitoba Hydro's
24 development of its hydro power
25 resources."
2115
1 The report then goes on to discuss
2 effects from Hydro operations.
3 "While hydroelectric stations have few
4 air emissions..."
5 and that is referring to the criteria pollutants
6 such as sulfur dioxide,
7 "... they can have significant
8 environmental effects related to the
9 altered flow of bodies of water, water
10 quality degradation, effects on fish
11 and aquatic population, blockage of
12 upstream fish migration and flooding
13 of land. In addition, the decay of
14 organic matter in the shallow lakes
15 created as a result of hydroelectric
16 projects results in the production of
17 small amounts of greenhouse gases."
18 The alternative to the business as
19 usual energy path uses even more local renewable
20 energy sources. Now, this may sound idealistic,
21 but the economic and environmental benefits are
22 very real, and you have heard from Senator
23 Anderson and Senator Kubly on that point.
24 Hopefully, you will be able to hear from
25 Commissioner Jim Nichols who can tell you about
2116
1 the tangible benefits in their jurisdiction. But
2 equally important, through the National Wind
3 Energy Coordinating Committee, there have been and
4 there will continue to be significant efforts to
5 work on ensuring that electricity generated from
6 renewable energy sources such as wind will be able
7 to be transmitted to the end users.
8 In closing, it seems what is at stake
9 here involves more than an economic factor for the
10 Province of Manitoba, and it involves more than
11 the Province fulfilling all of its obligations to
12 indigenous peoples. It is about Manitoba's true
13 leadership role with respect to the essence of the
14 Kyoto Protocol. It is about Manitoba's efforts to
15 curb harmful greenhouse gas emissions in ways that
16 can be most effective in the Province and in other
17 markets. Benefits from these efforts, and risks
18 from business as usual, can touch Manitobans and
19 extend well beyond the geopolitical boundaries of
20 the Province.
21 From my vantage point, it appears this
22 Commission has an incredible challenge before it.
23 You have lots of information to synthesize and
24 information on which to make a fully-informed
25 decision about the proposed Wuskwatim Generation
2117
1 Project. Your recommendations will set a
2 precedent for future reviews of Manitoba Hydro
3 development intentions as discussed in their
4 filings in these hearings. In the final analysis,
5 the decision of the Manitoba Clean Environment
6 Commission will have profound effects on North
7 America's environmental and energy future, as well
8 as on the lives of many generations to come.
9 Thank you for your attention.
10 THE CHAIRMAN: Mr. Mayer?
11 MR. MAYER: Good afternoon, sir. I
12 have a couple of, firstly, process questions. You
13 are being presented as a witness on behalf of
14 Canadian Nature Federation. When were you
15 retained, sir?
16 MR. RUDNICKI: I am sorry, I didn't
17 hear the question?
18 MR. MAYER: When were you retained by
19 the Canadian Nature Federation?
20 MR. RUDNICKI: I think it was the end
21 of February we talked about this hearing taking
22 place.
23 MR. MAYER: End of February, you mean
24 like two weeks ago?
25 MR. RUDNICKI: Middle to end of
2118
1 February, yes.
2 MR. MAYER: Is that the first time you
3 have been contacted by them?
4 MR. RUDNICKI: No, I have worked with
5 the Canadian Nature Federation on other issues in
6 the past.
7 MR. MAYER: The reason I raise this,
8 sir, is that there are certain rules regarding
9 pre-filed evidence and expert reports being filed
10 in advance. I take it you wouldn't have had any
11 opportunity to produce the document which we have
12 today any earlier than this; am I correct in that
13 assumption?
14 MR. RUDNICKI: I think that is pretty
15 accurate.
16 MR. MAYER: Now, to a little more --
17 one other item. We also understand from your --
18 from the C.V. we have been provided, I take it
19 again by the Canadian Nature Federation, that you
20 have, since 2002, been working with Pimicikamak?
21 MR. RUDNICKI: That's correct.
22 MR. MAYER: What you do for
23 Pimicikamak, sir?
24 MR. RUDNICKI: I am retained to deal
25 with legal and policy issues.
2119
1 MR. MAYER: You are the lawyer for
2 Pimicikamak in Minnesota?
3 MR. RUDNICKI: I am not counsel for
4 Pimicikamak in Minnesota.
5 MR. MAYER: All right. Let me try
6 this again. You are a lawyer?
7 MR. RUDNICKI: I am a lawyer.
8 MR. MAYER: You are an advocate in --
9 you are a governmental affairs advocate and you
10 have been working with Pimicikamak since 2002?
11 MR. RUDNICKI: That's correct.
12 MR. MAYER: You advise on legal
13 matters?
14 MR. RUDNICKI: I advise on policy
15 issues and general climate of energy and
16 environmental issues.
17 MR. MAYER: I won't go any further
18 than that, I don't want encroach upon
19 solicitor/client relationship, sir.
20 One matter that I have arising out of
21 your report, on page 4 of 9, the second full
22 paragraph in, you refer on the second line to
23 subsidized hydroelectricity.
24 What are you referring to there as
25 subsidized hydroelectricity?
2120
1 MR. RUDNICKI: Well, again, based on a
2 volume of information from a number of sources,
3 including ELPC, it is quite clear that there are
4 certain environmental harms, there are certain
5 social costs associated with various hydro
6 projects. And those are sometimes referred to as
7 externalities, or they are also referred to as
8 subsidies. In other words, there is a
9 displacement of burden on to the environment or
10 people.
11 MR. MAYER: Who do you suggest --
12 firstly, are you suggesting that the power
13 produced by Manitoba Hydro is subsidized
14 hydroelectricity, sir?
15 MR. RUDNICKI: I am not in a position
16 to respond to Manitoba Hydro operations generally,
17 but I can tell you what I understand about hydro
18 in a variety of venues that there are those
19 problems. I think some of the other witnesses
20 actually provide a lot of substance on that.
21 MR. MAYER: I am trying to get -- I
22 guess, I have to try to get down to your
23 definition of subsidy then.
24 If we assume that the damage, or any
25 damage that is or was created as a result of hydro
2121
1 development was compensated by the utility, and
2 therefore, undoubtedly paid for by the ratepayers,
3 would you consider that subsidization, sir?
4 MR. RUDNICKI: If there are situations
5 where there is environmental damage and harm to
6 people, and all those harms and damage have been
7 fully mitigated, I guess one could argue that the
8 costs have been internalized into the price of the
9 electricity, but that assumes a lot. Again, how
10 does one measure mitigation? How does one measure
11 preventing future harms?
12 MR. MAYER: In taking your definition,
13 sir, and extending it, any project or any method
14 of producing electricity which causes some
15 environmental degradation or some harm to somebody
16 is, by your definition -- unless it has been fully
17 compensated and/or fully mitigated -- is by your
18 definition subsidized power; right?
19 MR. RUDNICKI: I think what has
20 happened is that there is often the call, at least
21 in the States, for the free market to work its
22 power. But for that to happen there would have to
23 be clear and accurate economic signals about, in
24 this case, energy resources. There would have to
25 be clear economic signals about alternatives. And
2122
1 any time society at large bears a burden, whether
2 it is increased health cost due to asthma from the
3 emissions from coal-fired power plants, or whether
4 it is the environment itself through harmed rivers
5 or water quality, those are costs. It's being
6 borne by the people, it is being borne by the
7 environment. Unless those harms are somehow fully
8 captured in the price of electricity, I think it
9 could be viewed as a subsidy.
10 MR. MAYER: So the short answer to my
11 question, in your view, is yes -- or do you
12 remember the question I originally asked?
13 MR. RUDNICKI: Please remind me what
14 the question is?
15 MR. MAYER: I said, sir, in your view,
16 any production of electric energy that results in
17 some environmental degradation or some harm to
18 somebody, that is not fully recognized,
19 compensated for, and/or mitigated, is subsidized
20 power; right?
21 MR. RUDNICKI: Anything that is not
22 fully internalized is subsidy, yes.
23 MR. MAYER: You will have to
24 understand, sir, that having a little bit of
25 knowledge of our softwood problem, your definition
2123
1 of subsidy can be of some concern to us. I have
2 no further questions.
3 THE CHAIRMAN: Mr. Sargeant?
4 MR. SARGEANT: Mr. Rudnicki, in your
5 closing paragraphs you talked about Manitoba's
6 leadership role with respect to Kyoto matters. I
7 noted from the evidence of Senators Anderson and
8 Kubly that they said that at present about 75
9 percent of the indigenous energy, or electric
10 energy produced in Minnesota, is in coal-fired
11 plants and about 20 percent is in nuclear plants.
12 How does a move away from hydro work
13 towards the Kyoto principles, given that state of
14 facts in Minnesota at the present time?
15 MR. RUDNICKI: Well, I guess there are
16 lots of factors to consider there. I don't know
17 that, based on the reports I have seen and the
18 evidence I have heard today, that it is amply
19 clear that there aren't some problems associated
20 with hydro. In other words, there are greenhouse
21 gas emissions, for example. But even putting that
22 aside, if there is an opportunity to develop an
23 energy resource within 10, 15, 20 miles from
24 demand, or even within 100 to 200 miles from
25 demand, concepts regarding distributed energy
2124
1 would suggest that is a much more prudent approach
2 to take than to develop an energy resource that is
3 three, four, five times the distance from the
4 demand centre.
5 So the reason why I --
6 MR. SARGEANT: Even if that is
7 produced by coal-fired plant?
8 MR. RUDNICKI: Well, I think in that
9 case you are dealing with line loss issues and
10 efficiencies. So I believe that is pretty
11 accurate across the board.
12 MR. SARGEANT: I gather from the tone
13 of your paper, you are suggesting that Minnesota
14 go -- or is headed in the direction of having a
15 huge percentage of its energy generated by wind
16 power. Is that correct?
17 MR. RUDNICKI: What I was trying to do
18 is merely reflect to you what I perceive to be an
19 important market factor that I did not see
20 addressed in the justification need for an
21 alternative to statement. In that statement --
22 again, you have to keep in mind, we are working
23 with very, very limited resources, and instead of
24 tangling your feet, I was dealing with some CDs,
25 so that was a much more manageable situation.
2125
1 What struck me as an important element
2 that I thought you ought to be aware of and hear
3 and see is the perspective from the other side of
4 the border involving these renewables. Instead of
5 being marginalized, as I thought they were in the
6 justification need for alternative to documents,
7 there is a reality that suggests they are actually
8 vibrant, growing, developing. The policy
9 positions that were articulated to you from the
10 Senators represent their perspectives, but I think
11 more importantly there is already some systemic
12 move, as evidenced by the statutes and as
13 evidenced by the rules that govern the selection
14 process for various energy resources. So, it
15 represents a significant factor, if one is using
16 the business as usual scenario, which downplays
17 the potential versus the reality of the market,
18 which is pretty dynamic.
19 MR. SARGEANT: Senator Anderson told
20 us that for most firms the goal is, or best
21 efforts to be 10 percent by 2015, and for Excel
22 there is a requirement to be 10 percent renewable
23 resources -- renewable source by 2015. In your
24 view, is it going to be higher, or significantly
25 higher proportion of indigenous generation by 2015
2126
1 than 10 percent?
2 MR. RUDNICKI: I don't have the facts
3 with me right now to answer that, but I can give
4 you just a synopsis of what is happening. Right
5 now Excel Energy is charging a premium per month
6 for people who want to buy electrons generated by
7 wind turbines. I think it is something like $2
8 per 200-kilowatt hours per month. That is a way
9 of capitalizing wind projects.
10 There is an another generator, Great
11 River, which also was one of the pioneers in wind
12 power. And what they are finding is that they
13 sell out. If they have a block of 300, 400
14 megawatts, a certain portion of that they can sell
15 quickly because people are willing to pay a
16 premium. Although, there is an argument that says
17 it should be treated like any other resource, but
18 consumers are willing to pay a premium for
19 electricity that they know is generated in an
20 environmentally sound and socially responsible
21 manner.
22 MR. SARGEANT: How do people know that
23 they are getting electricity from a wind plant
24 when it is all coming through a centralized
25 distribution system?
2127
1 MR. RUDNICKI: That's a good question.
2 MR. SARGEANT: That sounds like smart
3 marketing.
4 MR. RUDNICKI: I always get asked that
5 question, and it is not necessarily knowing about
6 one particular electron, but the fact that there
7 is a certain block dedicated to this wind
8 capacity. So I think if the market, if the energy
9 sources used to generate electricity truly
10 reflected what we were talking about moments ago,
11 the externalized costs, the market signals would
12 be quite accurate. Generators, suppliers like
13 Excel, consumers could make fully informed
14 decisions, and you would find a greater share of
15 that market happening through wind without any
16 mandates from the State Government.
17 MR. SARGEANT: Thank you.
18 THE CHAIRMAN: Mr. Rudnicki, just to
19 follow up on this question, you are referring to
20 the -- from what I read or understand of your
21 presentation, there are significant changes
22 occurring in the United States from the usual as
23 you go. But, I distinctly heard Senator Anderson
24 a while ago saying that she had introduced a bill
25 with a provision for establishing a goal of 20
2128
1 percent increase in renewable sources of energy
2 within Minnesota by 2020, I believe. That was
3 defeated. The goal now stands at 10 percent by
4 2015.
5 So how does that make you confident
6 that the scenario that you are painting within the
7 next dozen or 20 years, make it as rosy as you
8 think it might be, when they are not willing to go
9 along that route according to legislation they
10 have adopted?
11 MR. RUDNICKI: Well, two parallel
12 tracks to answer that question.
13 One, I think the British have
14 discovered that you can go up to about 20 percent
15 renewable from wind without having system
16 instability. The Germans are pushing for 30
17 percent wind as the renewable component for their
18 electricity grid system.
19 I think what we will see, and what we
20 have seen is a dramatic drop in the generating
21 cost. First of all, when you think of wind, there
22 is no cost for the fuel. It is the capital
23 investment in the tower and the generating unit
24 and the controlling computers. That, it is my
25 understanding, has dropped dramatically. And from
2129
1 what I have read, Senator Anderson was quite
2 right. When you compare the power purchase
3 agreements between various traditional energy
4 sources and wind, the numbers actually are pretty
5 dramatic. Wind is very competitive. I think that
6 that will drive, despite the mandate being 10
7 percent versus 20, again with accurate economic
8 signals, companies like Excel Energy will find it
9 is in their corporate best interest to use what
10 ultimately is the local home-grown resource.
11 THE CHAIRMAN: But that is a very
12 different scenario from the one that Senator
13 Anderson painted to us. I mean, you are talking
14 about 20 percent energy, 30 percent energy coming
15 from wind sources, and when we hear that they are
16 not even prepared to go to 20 percent over the
17 next almost 20 years, I don't know what gives you
18 that confidence. Where do you draw that level of
19 knowledge to estimate that within the next 10, 15
20 years they are going to reach and surpass that
21 goal?
22 MR. RUDNICKI: I don't know if I would
23 go so far as to say they are going to reach and
24 surpass 20 percent.
25 THE CHAIRMAN: This is 15 -- 10
2130
1 percent the goal is?
2 MR. RUDNICKI: Right. I think once
3 again it goes back to the market. The reality is,
4 there are a number of jurisdictions where world
5 communities see the economic benefit. Once again,
6 the buyers of electricity are seeing the economic
7 benefits. So with accurate economic signals, I
8 would say it is the market, the market will use
9 the economic signals and ultimately surpass the
10 mandate.
11 THE CHAIRMAN: Okay. Senator Anderson
12 also referred to a caveat that the utilities --
13 there is a policy, and they have to go the route
14 of renewable, but they can resort to a caveat
15 within the statutes. And if they can show it is
16 not in the public interest, for instance, they can
17 show that it is going to increase the rates to the
18 users, they might -- that might be rationale or
19 justification for them not even reaching the
20 stated goals.
21 So, I don't know, I sort of have the
22 opposite feeling, or I sort of see the picture
23 being very different from the one you are
24 portraying.
25 MR. RUDNICKI: I think what you
2131
1 describe is the business as usual scenario. That
2 is my point. As long as the economic signals are
3 lacking, as long as industry and reports and
4 analyses are based on that tunnel vision of
5 business as usual, those are the types of
6 conclusions we will see.
7 What I see, and I am trying to be
8 quite pragmatic, is the leadership from Denmark --
9 I mean, they are dealing now with the nuances of
10 wind. It is not just, how do we produce virtually
11 all of our electricity from wind, but how do you
12 deal with the flicker effect? In other words, if
13 you have wind turbine and you don't want to have
14 shadows in certain places, how do you orient your
15 tower? I mean, they are dealing with the frosting
16 on the cake, in my opinion. They are leading the
17 way.
18 In comparison purposes, I believe
19 there are 12,000 megawatts that are required,
20 somewhat equivalent to Minnesota, they supply
21 about 25 percent of their electricity from wind.
22 Again, the Germans are doing this. The economics
23 are making sense. The home-grown proximity to the
24 energy source itself is making sense for the local
25 economies, the regional economies. When you begin
2132
1 adding all these factors together, it does point
2 to a new direction. It is the alternative energy
3 scenario, but it has to be understood as the
4 potential that is to be realized.
5 THE CHAIRMAN: I just have one more --
6 more a comment than a question perhaps, and it is
7 somewhat with tongue in cheek. Because you have
8 referred to costs of mitigating hydroelectricity
9 as being in some way subsidizing, in response to
10 Mr. Mayer's question, I felt like asking you
11 whether the multi millions of dollars of Federal
12 and State monies that were applied for clean-up on
13 the Hudson River, and in Lake Erie, and all the
14 others that haven't been done yet, whether those
15 are subsidies too? What is good for the gander is
16 good for the goose.
17 MR. RUDNICKI: I think the subsidy
18 comes in that, as a taxpayer, I end up taking care
19 of a problem from industry. Yes, that is a
20 subsidy. That is a burden. It is like various
21 energy resources that cause health problems or
22 damaged ecosystems. Somewhere, someone, or some
23 ecosystem is bearing the burden. I think because
24 of that, unless we fully account for those harms
25 on a holistic basis, I think it is very difficult
2133
1 for the market to make prudent decisions.
2 THE CHAIRMAN: The point I am trying
3 to make, it is applicable on both sides of the
4 border, not just on one side.
5 MR. RUDNICKI: Um-hmm.
6 THE CHAIRMAN: I have no further
7 questions. I don't know if other members of the
8 audience have questions. Ms. Kathi Avery Kinew.
9 MS. AVERY KINEW: Good day, sir. I
10 was just wondering, the ratios of the contracts
11 right now, 75 percent coal, 20 percent nuclear, 5
12 percent renewable, and if that goes up to the 10
13 percent, why do you say on page 4 that hydro might
14 be displacing local renewable energy? Because
15 those coal and nuclear contracts must have an end,
16 it must be a fixed term. So why wouldn't hydro
17 being displacing those sources? Why do you assume
18 that they would be displacing renewable?
19 MR. RUDNICKI: Well, I guess the way I
20 look at it, there is an energy pie and there are
21 certain slices.
22 MS. AVERY KINEW: That's the way I
23 look at it too.
24 MR. RUDNICKI: And hydro is in there.
25 I think the argument, as I understand it from the
2134
1 proponents, is that it is assumed any production
2 of hydro will displace a fossil fuel.
3 I think, once again, if we go back to
4 the business as usual scenario, that that may be
5 accurate. The assumption is there will be more
6 coal. That is the assumption -- or from the
7 remaining coal-fired power plants, the capacity
8 factor will be increased, and as a result it could
9 be argued that hydro will be displacing coal.
10 That is the business as usual scenario.
11 Under the alternative scenario, or
12 Repowering the Midwest scenario, there is greater
13 opportunity for the wind resources to literally
14 compete in the marketplace.
15 So I think it may be a bit
16 presumptuous to say that hydro will only be
17 displacing coal, when in reality local wind
18 resources are a viable alternative.
19 MS. AVERY KINEW: I don't see your
20 logic in saying that it would necessarily displace
21 renewable energy. Why wouldn't it just as
22 logically displace coal or nuclear? I just don't
23 see where you end up with that -- that assumption
24 became a conclusion I think.
25 MR. RUDNICKI: If there is 10 percent
2135
1 of the market that will be renewable, or should be
2 renewable wind, that is a slice of the fixed pie.
3 And sometimes the pie is expanding, sometimes the
4 pie is contracting, depending on how we do on
5 demand-side management. Maybe the more important
6 point is, are we talking about local renewable or
7 are we talking about a distant renewable?
8 MS. AVERY KINEW: This was some
9 evidence we heard the other day about how Hydro
10 sees that there is long-term contracts and you
11 have to make a long-term commitment when you are
12 building fossil fuel plants, et cetera, and they
13 feel that those would be the ones that would be
14 displaced. Maybe it is just different evidence
15 that you haven't seen yet.
16 MR. RUDNICKI: You used the word
17 "fuel," and they fuel this. I guess I am saying
18 that is the business as usual scenario, and it
19 doesn't recognize the new paradigm shift that we
20 have been working for maybe 10 or 15 years.
21 MS. AVERY KINEW: I just can't make
22 the link, even with the paradigm shift, that it is
23 not possible to displace nuclear and coal. I
24 can't make the leap of understanding that it is
25 not possible to displace nuclear and fuel, that
2136
1 you assume that it is going to be replacing the
2 increasing renewable. I don't see that.
3 MR. RUDNICKI: Those are fixed energy
4 sources or supplies.
5 MS. AVERY KINEW: They are not fixed
6 forever though, they are time limited contracts.
7 That is the way I understood it.
8 THE CHAIRMAN: Yes.
9 MS. AVERY KINEW: Anyway, thank you.
10 THE CHAIRMAN: Mr. Mayer, one more
11 question.
12 MR. MAYER: I think I am starting to
13 understand. What you call the business, you have
14 determined one scenario as the business as usual
15 scenario, and another one the alternative energy
16 scenario. If this Commission determines that the
17 business as usual scenario is the probable
18 scenario between now and 2020, then I am assuming
19 you are recommending we accept the proponents'
20 proposal; am I correct?
21 MR. RUDNICKI: What I am suggesting is
22 there are some incredible dynamics south of the
23 Canadian border, south of Manitoba, and there is a
24 much bigger story for you to learn and hear and
25 see. And to make a fully informed decision,
2137
1 perhaps those are issues that ought to be
2 researched even more thoroughly and through an
3 independent source.
4 MR. MAYER: Assuming for a moment,
5 sir, we can get by our ignorance as to what is
6 happening south of the border, and we come to a
7 conclusion as a Commission that the business as
8 usual scenario is the probable scenario, then
9 under those circumstances you would recommend
10 approval of the proponents' project, I take it?
11 MR. RUDNICKI: I am not here to
12 provide any recommendation on the project.
13 MR. MAYER: Just to enlighten us?
14 THE CHAIRMAN: Other questions?
15 Mr. Williams?
16 MR. WILLIAMS: Good afternoon,
17 Mr. Rudnicki. My name is Byron Williams, and I am
18 an attorney with the Public Interest Law Centre
19 and I represent the Consumer's Association and the
20 Manitoba Society of Seniors in this proceeding.
21 In hearing your report, I think I
22 heard you say that you were basing a lot of the
23 material in your report on materials provided by
24 the Environmental Law & Policy Center, or ELPC; is
25 that right?
2138
1 MR. RUDNICKI: That's correct. Due to
2 limited resources, it would have been virtually
3 impossible to amass the information that has been
4 collected by them and compiled over the course of
5 many years.
6 MR. WILLIAMS: In fact, I think I
7 recall hearing you on at least two occasions say
8 you were borrowing from their report. Would that
9 be fair?
10 MR. RUDNICKI: I think, as we try to
11 understand a variety of issues, we read, we
12 research, we analyse, and we try to draw some
13 conclusions. So, I have reviewed a number of
14 their reports and shared with you some of my
15 thoughts about those issues.
16 MR. WILLIAMS: Now, I have heard you
17 describe yourself I believe as an attorney and a
18 government affairs advocate. Is that correct?
19 MR. RUDNICKI: That's correct.
20 MR. WILLIAMS: I didn't hear you
21 mention a Ph.D. or Masters in Economics. Do you
22 have one of those?
23 MR. RUDNICKI: No, I don't.
24 MR. WILLIAMS: Would you have a Ph.D.
25 or Masters in Engineering?
2139
1 MR. RUDNICKI: I don't have such a
2 degree.
3 MR. WILLIAMS: How about a MBA?
4 MR. RUDNICKI: I have referenced a
5 number of economic factors that anybody in this
6 room could cite if they were to pick up these
7 reports or look at them on the website. A number
8 of experts have compiled the reports. And again,
9 it is up to the Commission and other members to
10 test that information.
11 MR. WILLIAMS: So, you are relying
12 upon the expertise of others and you have
13 synthesized this material for the Commission;
14 would that be fair?
15 MR. RUDNICKI: I pulled out some
16 significant issues relevant to the export market
17 that the proponents of the project rely upon.
18 MR. WILLIAMS: Do you have a Ph.D
19 or MA in anything?
20 MR. RUDNICKI: I have a Jurist
21 Doctorate degree.
22 MR. WILLIAMS: Now, you indicate you
23 work in government affairs. I have sometimes
24 heard the term lobbyist as a synonym for
25 government affairs. Is that a characterization
2140
1 that you would accept?
2 MR. RUDNICKI: I work in the area of
3 policy matters and legal matters, and I will leave
4 it at that.
5 MR. WILLIAMS: So you don't accept the
6 characterization of lobbyist?
7 MR. RUDNICKI: We could talk at end
8 about the definition of lobbyist.
9 MR. WILLIAMS: You work for PCN, or
10 you have provided some services for PCN; is that
11 correct?
12 MR. RUDNICKI: As an attorney and as a
13 government affairs advocate, a number of clients
14 retain me.
15 MR. WILLIAMS: Can you give me just a
16 sampling of some of those other clients who may
17 retain you who are in the public domain? For
18 example, are any of your clients associated with
19 the wind industry?
20 MR. RUDNICKI: I work with a number of
21 institutional clients, and that's what I can tell
22 you.
23 MR. WILLIAMS: Are you telling me that
24 you don't work with any clients with investments
25 in the wind industry?
2141
1 MR. RUDNICKI: I am not retained by
2 any wind industry clients. What I shared today
3 was information that once again is available on
4 the website, it is available on hard copy. And
5 what is significant is there are a lot of
6 presumptions that I understand in the
7 justification need for and alternative to that the
8 project proponents are using and basing the
9 feasibility of the project on. I guess what I am
10 suggesting is that this Commission might want to
11 test some of that information based on other
12 independent sources and data that is available.
13 MR. WILLIAMS: Now, in looking at the
14 paper that you have provided today, at the bottom
15 of page 3 of 9, you reference a quote from ELPC in
16 terms of the wind energy potential of the Midwest
17 States. I see a reference to considering only
18 class 3 and better resource areas.
19 I wonder if you could define for me
20 what is the definition of a class 3 resource area,
21 sir?
22 MR. RUDNICKI: It relates to various
23 wind speeds for certain amounts of time, and I
24 don't have that specific fact at my fingertips
25 right now. But what the point is in that little
2142
1 paragraph, it is that not maximizing total
2 potential wind capability, there is still a lot of
3 wind, and there is enough wind that some States
4 could be indeed be exporters of electricity using
5 wind power.
6 MR. WILLIAMS: Are you qualified to
7 tell this panel that class 3 wind resources are
8 economically viable at this point in time?
9 MR. RUDNICKI: I can't comment on
10 that.
11 MR. WILLIAMS: I just want to go up
12 one paragraph above the class 3 reference, and you
13 are citing the American Wind Energy Association,
14 placing the number -- the potential wind energy
15 for Minnesota at 75,000 megawatts. Are you aware
16 with the breakdown of that is in terms of class 3
17 resources, class 4, or class 5?
18 MR. RUDNICKI: I think what is
19 significant in this set of research and data that
20 is available is that various government agencies,
21 various federal, state agencies, and industry
22 interests, have done a lot to measure the wind
23 potential under the alternative "Repowering the
24 Midwest" vision for what energy sources could meet
25 our electricity need. There is incredible
2143
1 potential. Whether it is class 1, 2, 3, 4, or 5,
2 whatever it may be, there are certain regions in
3 the State of Minnesota that are very rich
4 resources.
5 MR. WILLIAMS: I will follow up on
6 your comment, but perhaps we could get an answer
7 to my question. The 75,000 megawatts, are you
8 able to provide a breakdown into what is class 1,
9 2, 3, 4, or 5?
10 MR. RUDNICKI: The American Wind
11 Energy Association does indeed have a very
12 detailed mapping -- once again, thanks to
13 anemometer readings that have taken over for many
14 years. So, yes, that is available.
15 There is also detailed information
16 from the Minnesota Department of Commerce, very
17 detailed wind mapping for State of Minnesota.
18 MR. WILLIAMS: Just a final
19 question -- you have talked about State
20 authorities and others -- is the American Wind
21 Energy Association, would I be right in assuming
22 that that is an industry association?
23 MR. RUDNICKI: As the name states.
24 MR. WILLIAMS: It represents the wind
25 industry; is that correct?
2144
1 MR. RUDNICKI: There are a variety of
2 industry associations representing lignite, coal,
3 nuclear, hydro; we have heard about some of those
4 today. And, yes, manufacturers of wind turbine
5 equipment and towers certainly do have an
6 association to represent them.
7 MR. WILLIAMS: Thank you for your
8 assistance, sir.
9 THE CHAIRMAN: Any more questions?
10 Ms. Valerie Matthews Lemieux.
11 MS. MATTHEWS LEMIEUX: Mr. Rudnicki,
12 you have given us some details about various
13 legislation in Minnesota. I am advised that
14 Minnesota also has legislation that indicates that
15 lobbyists have to be registered; is that right?
16 MR. RUDNICKI: That is correct.
17 MS. MATTHEWS LEMIEUX: You are
18 registered as a lobbyist in Minnesota; is that not
19 true?
20 MR. RUDNICKI: I am registered.
21 MS. MATTHEWS LEMIEUX: You are a
22 registered lobbyist for Pimicikamak Cree Nation in
23 Minnesota; is that not true?
24 MR. RUDNICKI: That is correct.
25 MS. MATTHEWS LEMIEUX: Peter Grills is
2145
1 also a lawyer in Minnesota, correct?
2 MR. RUDNICKI: That's correct.
3 MS. MATTHEWS LEMIEUX: You work with
4 Mr. Grills on behalf of Pimicikamak Cree Nation;
5 is that true?
6 MR. RUDNICKI: That's correct.
7 MS. MATTHEWS LEMIEUX: Mr. Grills is
8 also a paid lobbyist under the same legislation in
9 Minnesota; is that right?
10 MR. RUDNICKI: I can't answer that
11 question.
12 MS. MATTHEWS LEMIEUX: You don't know,
13 okay.
14 Some of the activities that you have
15 been involved with on behalf of Pimicikamak Cree
16 Nation in Minnesota are the pursuit of legislative
17 changes; is that correct?
18 MR. RUDNICKI: I have worked with
19 Pimicikamak on a variety of public education
20 initiatives.
21 MS. MATTHEWS LEMIEUX: Sir, I suggest
22 to you that last year in the Senate in Minnesota
23 you were on the record on behalf of Pimicikamak
24 Cree Nation in Senate file 995; is that true?
25 MR. RUDNICKI: That's correct.
2146
1 MS. MATTHEWS LEMIEUX: You were there
2 with Mr. Grills and also Michael Noble of ME3; is
3 that correct?
4 MR. RUDNICKI: That's correct.
5 MS. MATTHEWS LEMIEUX: ME3, could you
6 tell us what ME3 is, very briefly?
7 MR. RUDNICKI: It is non-governmental
8 organization based in St. Paul, Minnesota.
9 MS. MATTHEWS LEMIEUX: One of their
10 major campaigns is the Just Energy Campaign in
11 option to Manitoba Hydro; is that correct?
12 MR. RUDNICKI: I am aware of the Just
13 Energy Campaign, and I don't know that is in
14 opposition to Manitoba Hydro.
15 MS. MATTHEWS LEMIEUX: Sir, you have
16 been with the Just Energy Campaign; is that true?
17 MR. RUDNICKI: I am aware of and work
18 with a number of NGOs, and some NGOs take various
19 positions, and I have no control or interest in
20 what positions they do take.
21 MS. MATTHEWS LEMIEUX: That wasn't my
22 question. My question was whether you have been
23 involved with the Just Energy Campaign?
24 MR. RUDNICKI: I am aware of them. I
25 am not involved in their campaign.
2147
1 MS. MATTHEWS LEMIEUX: Okay. The
2 legislation that was before the Senate last year
3 that you were involved in, that was legislation
4 that would have required a detail accounting of
5 all socioeconomic and environmental effects of the
6 entire hydro system in Manitoba; is that correct?
7 MR. RUDNICKI: I can't recall what 995
8 specifically said.
9 MS. MATTHEWS LEMIEUX: Are you able to
10 agree that was, though, the general thrust of the
11 legislation, if you can't give us exactly what it
12 said?
13 MR. RUDNICKI: I think there is lots
14 of concern about externalities. I believe that
15 Senate file went to the issue of externalities,
16 trying to better understand social and
17 environmental costs of energy resources.
18 MS. MATTHEWS LEMIEUX: Including from
19 Manitoba Hydro, correct?
20 MR. RUDNICKI: I don't know that it
21 distinguished one from the other.
22 MS. MATTHEWS LEMIEUX: Okay. So that
23 Senate bill was defeated; is that true?
24 MR. RUDNICKI: No, it was heard in
25 committee and I believe that is where it stopped.
2148
1 MS. MATTHEWS LEMIEUX: In fact, it is
2 not the law in Minnesota at the moment, is it?
3 MR. RUDNICKI: I am sorry?
4 MS. MATTHEWS LEMIEUX: It is not the
5 law in Minnesota at the moment?
6 MR. RUDNICKI: There are several
7 thousand bills that are introduced in the House
8 and Senate and are not --
9 MS. MATTHEWS LEMIEUX: Sir, I am just
10 talking about that particular piece of
11 legislation, it was defeated. It is not the law
12 in Minnesota?
13 MR. RUDNICKI: I don't believe it was
14 defeated. It was never put a vote. Again, those
15 are details that would be contained in the Senate
16 record for that particular committee.
17 MS. MATTHEWS LEMIEUX: Just to help
18 everybody else in the room, sir, since they may
19 not be as familiar with the Minnesota processes
20 as you are, the bill was defeated at the Committee
21 stage, it didn't make it to the House; is that
22 correct?
23 MR. RUDNICKI: That is not correct.
24 The Senate and the House in Minnesota have bills
25 that go before them. Those bills are voted on by
2149
1 House or Senate members, depending on what body
2 they are in. Some bills come up and are heard,
3 some are voted on, and others are not voted on.
4 So, I think we could go to the record to verify
5 that.
6 MS. MATTHEWS LEMIEUX: Just to go
7 through a couple of the other functions that you
8 and/or others are performing on behalf of
9 Pimicikamak, in addition to the legislative
10 changes, have you been involved with the minority
11 shareholders resolution at the Excel's shareholder
12 meetings?
13 MR. RUDNICKI: I have been to those
14 shareholder meetings.
15 MS. MATTHEWS LEMIEUX: On behalf of
16 Pimicikamak?
17 MR. RUDNICKI: I think at some point
18 we are bumping against attorney/client privilege,
19 at least in the United States and in Minnesota.
20 MS. MATTHEWS LEMIEUX: You said you
21 were not appearing here as their lawyer and you
22 weren't their lawyer, so I am not sure how you can
23 claim privilege?
24 MR. RUDNICKI: I am an attorney and
25 sometimes under certain situations, the
2150
1 attorney/client privilege arises, although one may
2 not be retained; a client may not have retained an
3 attorney.
4 MS. MATTHEWS LEMIEUX: Okay. In terms
5 of the last area of involvement then, you are
6 also -- you and others have also been involved on
7 behalf of Pimicikamak in Public Utilities
8 Commission proceedings; is that correct?
9 MR. RUDNICKI: That's a pretty vague
10 question.
11 MS. MATTHEWS LEMIEUX: Let's go
12 through it then. You mentioned in your document
13 that you have provided to our Commission that
14 there are proceedings before the Minnesota Court
15 of Appeal, correct?
16 MR. RUDNICKI: That's correct.
17 MS. MATTHEWS LEMIEUX: In fact, it is
18 Pimicikamak that has brought the proceedings
19 before the Minnesota Court of Appeal, correct?
20 MR. RUDNICKI: There may have been
21 multiple parties, but they were one of the
22 parties.
23 MS. MATTHEWS LEMIEUX: They were
24 multiple parties with others including ME3; is
25 that correct?
2151
1 MR. RUDNICKI: I think if we went to
2 the actual filing, we could find out who is on
3 record.
4 MS. MATTHEWS LEMIEUX: I am sure we
5 can do that.
6 You will agree with me that the Public
7 Utilities Commission, in that particular matter
8 that is before the Minnesota Court of Appeal,
9 concluded that its order had properly found that
10 the socioeconomic costs of Manitoba Hydro projects
11 have been adequately internalized by Manitoba
12 Hydro, have been taken into account in this
13 matter, and no further inquiry into the specifics
14 of those costs need be made. That was the finding
15 by the Public Utilities Commission in Minnesota;
16 is that correct?
17 MR. RUDNICKI: I am not familiar
18 enough with the record to answer that question.
19 MS. MATTHEWS LEMIEUX: Okay. Are you
20 familiar enough with the record to be able to
21 confirm for me that, in fact, there was an earlier
22 matter in that same proceeding that went to the
23 Minnesota Court of Appeal and it was ultimately
24 denied by the Court of Appeal? Are you familiar
25 with that?
2152
1 MR. RUDNICKI: You are probably
2 spanning many years here and I am not familiar
3 with all the details.
4 MS. MATTHEWS LEMIEUX: Okay. Your
5 date was since 2002. So, since around 2001, 2002?
6 MR. RUDNICKI: I would need to look at
7 the file.
8 MS. MATTHEWS LEMIEUX: Okay. Now, you
9 referred to the Department of Commerce. Were you
10 in the room when Senators Kubly and Anderson
11 testified?
12 MR. RUDNICKI: Yes, I was.
13 MS. MATTHEWS LEMIEUX: You heard then
14 the questions that I posed to them that the
15 Department of Commerce concluded last week and
16 made a presentation before Senator Anderson's
17 committee that Manitoba -- importation of hydro
18 from Manitoba is not in competition with wind?
19 MR. RUDNICKI: I think there are
20 some -- I understand what you are doing here with
21 your questions, but there needs to a little bit of
22 points of clarification.
23 There are Commissioners in these
24 agencies and the Commissioners are appointed by
25 the Governors. The Commissioners themselves
2153
1 actually appoint their staff and whether or not an
2 individual is speaking in an official capacity for
3 the particular department or agency or Commission
4 is something that I am not in a position to answer
5 here.
6 MS. MATTHEWS LEMIEUX: Okay, fair
7 enough.
8 In terms of the legislation that you
9 were involved in and that you have referred to
10 with the renewable definition, that would be the
11 2001 Energy Security and Reliability Act; is that
12 right?
13 MR. RUDNICKI: I was not involved in
14 2001 legislation.
15 MS. MATTHEWS LEMIEUX: That wasn't my
16 question, though. Your paper refers to -- this is
17 at the bottom of page 5, it talks about a
18 Minnesota statute and then it says "hydroelectric
19 with a capacity less than 60 megawatts."
20 MR. RUDNICKI: You know, we could
21 review the legislative history on that. I don't
22 know what year that goes to. What I did is I went
23 to the statute books under renewable energy
24 technologies and found that reference. We could
25 also find out what year that was modified.
2154
1 MS. MATTHEWS LEMIEUX: Are you able to
2 say whether it is, in fact, that Act?
3 MR. RUDNICKI: Is it what?
4 MS. MATTHEWS LEMIEUX: Is it that Act,
5 the Energy Security and Reliability Act -- the
6 quotation in your paper on page 5?
7 MR. RUDNICKI: Well, you are probably
8 using a chapter title and I don't know. I mean I
9 don't know.
10 MS. MATTHEWS LEMIEUX: Okay. The 60
11 megawatts for hydroelectricity that you are
12 referring to, that relates to the definition for
13 purposes of Minnesota's renewable portfolio
14 objectives; is that not correct?
15 MR. RUDNICKI: That is the guide for
16 determining renewable hydro, correct.
17 MS. MATTHEWS LEMIEUX: The renewable
18 hydro for proposes of the 10 percent goal that is
19 to be achieved, as you have described for us, by
20 2015, right?
21 MR. RUDNICKI: I think that's where
22 there is lots of ambiguity. The legislative
23 history could tell us what the basis was for that
24 number. As Senator Anderson pointed out, there
25 are a number of situations where statutes are not
2155
1 necessarily coordinated with one another. So, the
2 ambiguity here is regarding hydro, it is regarding
3 renewable, it is regarding 60 megawatts. And it
4 is clear there is legislative intent dealing with
5 some sort of size or scale factor on hydro.
6 I think what is also important maybe
7 for the Commission to understand is we are talking
8 about renewable portfolio standards and there is a
9 state issue, there is a federal issue. What is
10 significant is that most of these initiatives
11 regarding the standards are trying to promote
12 greater efficiency.
13 So, whether or not hydro could qualify
14 as a renewable under certain statutes goes to
15 whether or not there are incremental increases in
16 the efficiency for a particular generating site,
17 which is different than talking about new
18 construction or a new system.
19 MS. MATTHEWS LEMIEUX: Are you
20 familiar with a letter that was written by State
21 representative Ken Wolf and State Senator James
22 Metzen to the Premier of Manitoba and the
23 president of Manitoba Hydro in relation to that
24 legislation?
25 MR. RUDNICKI: Do you have an exhibit
2156
1 to show me?
2 MS. MATTHEWS LEMIEUX: I am just
3 wondering, first of all -- I can certainly show it
4 to you. Are you familiar with correspondence that
5 was written in your capacity as Pimicikamak's
6 lobbyist?
7 MR. RUDNICKI: You have multiple
8 questions. What is the first question?
9 MS. MATTHEWS LEMIEUX: I will show you
10 the letter and we will see if you are familiar
11 with it.
12 MR. RUDNICKI: Please.
13 MS. MATTHEWS LEMIEUX: According to
14 the letter, it indicates that the two Senators
15 were the persons that brought forward the
16 legislation in question; is that correct?
17 MR. RUDNICKI: Well, I don't know that
18 it specifically says that they are the authors of
19 the bill.
20 MS. MATTHEWS LEMIEUX: Have you seen
21 that letter before?
22 MR. RUDNICKI: I have seen this one,
23 yes.
24 MS. MATTHEWS LEMIEUX: Okay. I will
25 get it marked as an exhibit, please?
2157
1
2 (EXHIBIT MH/NCN 1011: Letter, May
3 25, 2001)
4
5 MR. RUDNICKI: What is interesting
6 about the letter that I was just shown by
7 counsel -- and I think the Commission ought to
8 know this and you ought to understand -- that
9 there are statutes. There is black letter law and
10 there was some problem with the black letter law
11 for some reason that one Senator and one
12 representative had to sign off on a letter.
13 Now, if there is a statute and you
14 have a House and you have a Senate that voted on
15 the legislation and it went to the Governor for
16 signature and it is black letter, what was it that
17 prompted, what was it that prompted this letter
18 from one Senator and one Representative to
19 supposedly clarify the legislation? I think that
20 is an interesting question that might be worth
21 pursuing. What prompted that letter? Because it
22 is not normal, we should understand --
23 MS. MATTHEWS LEMIEUX: Maybe --
24 MR. RUDNICKI: -- it is not normal for
25 a Senator nor a Representative to all of a sudden
2158
1 act as a court of law interpreting statutes.
2 Something had to have prompted that letter.
3 It doesn't just -- I can tell you this way: When
4 a new law is passed, a Senator and representative
5 don't automatically write a letter saying, by the
6 way, I think you ought to know what the meaning of
7 the statute is. That is not common practice. I
8 don't understand the history behind that letter.
9 I have seen the letter, I am aware of the letter
10 and I don't know what prompted that letter.
11 MS. MATTHEWS LEMIEUX: Maybe so that
12 the Commission is also familiar with the letter,
13 what we can do is we will read part of it into the
14 record and the Commission will certainly have the
15 entire copy. I think the first paragraph
16 indicates what the concern was. It says:
17 "As you know, the Minnesota
18 legislature recently passed
19 comprehensive energy policy
20 legislation. As the chief authors of
21 this legislation and chairmen of the
22 committees responsible for setting
23 Minnesota's energy policy, we want to
24 correct certain statements made in a
25 press release by Pimicikamak Cree
2159
1 Nation representatives concerning this
2 legislation.
3 First, we recognize the critical role
4 Manitoba's hydroelectric power plays
5 in supply electricity to Minnesota.
6 Minnesota and Manitoba have both
7 benefited from the long-standing
8 relationship between Manitoba and
9 Minnesota's utilities. As our State
10 and region face tightening energy
11 supplies in the next decade, we hope
12 to continue this beneficial
13 relationship.
14 The 2001 Energy Security and
15 Reliability Act confirms that
16 hydroelectricity is classified as a
17 renewable energy source in the State.
18 In fact, the Act directs utilities to
19 file green pricing tariffs for
20 renewable energy utilizing current
21 statutory definitions of renewable
22 energy, which includes all
23 hydroelectric power."
24 Then it goes on and it talks about the 60
25 megawatts. It says:
2160
1 "The Act also sets goals for the
2 development of eligible energy
3 technologies. This section of the Act
4 focuses on a subset of renewable
5 technologies that currently do not
6 play a major role in utilities'
7 portfolios. This is intended to
8 encourage development of emerging
9 technologies and less economically
10 competitive sources of energy. For
11 this purpose the Act sets a limit of
12 60 megawatts for any hydroelectric
13 eligible energy technology."
14 Then it goes on and it says:
15 "The act specifically defined the
16 emerging technologies in this way to
17 ensure that larger hydroelectricity
18 facilities and other non-eligible
19 technologies would still be considered
20 renewable energy in Minnesota.
21 We hope that this letter answers any
22 concerns regarding this legislation.
23 We look forward to continued trade and
24 a strong working relationship with
25 Manitoba."
2161
1 And it is signed by State Representative Ken Wolf,
2 Chair of the Regulated Industries Committee, and
3 State Senator James Metzen, Chair of the
4 Telecommunications, Energy and Utilities
5 Committee.
6 MR. GREWAR: Mr. Chairman, I would
7 just advise that would Exhibit MH/NCN 1011 and I
8 will ensure copies are provided.
9 MS. MATTHEWS LEMIEUX: I am sorry --
10 MR. GREWAR: Sorry, the exhibit number
11 MH/NCN 1011. I will get copies for the
12 Commission.
13 THE CHAIRMAN: Would you identify
14 yourself? Is this a point of order you are trying
15 to make?
16 MR. MONIAS: My name is Tom Monias. I
17 am with Cross Lake Band, number 276, the Northern
18 Flood Implementation manager. Madam lawyer -- Ms.
19 Valerie Lemieux was our --
20 THE CHAIRMAN: Sir are you making a
21 point of order? Is this a motion or is this a
22 question that you wish to ask of the proponents?
23 MR. MONIAS: I don't know how the
24 proceedings work. Just for the record, I want to
25 say this that Valerie Lemieux is our former legal
2162
1 counsel regarding the Northern Flood Agreement. I
2 would like to request the Chairman to also stop
3 this discussion because it is about us, our own
4 affairs. That's what I wanted to say.
5 THE CHAIRMAN: Okay. The point that I
6 have just heard is that the counsel who has just
7 been asking questions is a previous lawyer.
8 That's the point that I have heard. I am not sure
9 I heard the name of the group, PCN, and as such,
10 maybe the point that is being made is they
11 shouldn't be discussing their affairs.
12 MS. MATTHEWS LEMIEUX: I will respond
13 to that question. This is not the first time that
14 this question has come up. In fact, when I
15 appeared in Minnesota on behalf of the
16 Nisichawayasihk Cree Nation in the proceedings,
17 before the Minnesota Public Utilities Commission,
18 I had the pleasure of having the first complaint
19 lodged against me with the Law Society of Manitoba
20 by Pimicikamak following those proceedings.
21 It was ruled on by the Law Society and
22 they found that in fact there was no conflict in
23 relation to those relationships. If it is
24 necessary to do so, since it is my integrity that
25 is at stake, I can provide a copy of the letter
2163
1 from the Law Society of Manitoba.
2 THE CHAIRMAN: On this point?
3 MR. RUDNICKI: On this soliloquy that
4 has just taken place --
5 THE CHAIRMAN: Just a minute.
6 Mr. Grewar, I will allow the proceeding to carry
7 on. Ms. Valerie Lemieux, if you would eventually
8 please table that letter.
9 MS. MATTHEWS LEMIEUX: I certainly
10 will.
11
12 (UNDERTAKING MH/NCN 42: Produce letter from Law
13 Society)
14
15 THE CHAIRMAN: As soon as possible.
16 You had asked a question of
17 Mr. Rudnicki. We will allow him to respond.
18 MR. RUDNICKI: I think two points to
19 clarify here. There is the market issue in
20 Minnesota, which this Commission can analyse and
21 upon which you can make some decisions based in
22 getting independent evidence and data. Lots of
23 that is on the shelf ready to be looked at now.
24 Whether or not I have worked with a particular
25 client, I really don't think is germane.
2164
1 This is a bizarre situation because if
2 I were represented by legal counsel, I think there
3 would be objections raised here because a lot of
4 these questions are irrelevant. They are
5 irrelevant because the nature of the issue before
6 us is what is that export market, which the
7 Wuskwatim project proponents rely upon for the
8 feasibility of this project? Those are the issues
9 that are here and germane before this Commission
10 now.
11 That particular letter, again, with a
12 Senator and a representative's signature, is most
13 incredible because if there were some PR problems,
14 that is dealt with in a different way. But to
15 have gotten a Senator and a representative to
16 explain legislation that is black letter is highly
17 unusual. In fact, I have never seen anything like
18 that before. That came, by the way, before I was
19 involved in the case.
20 THE CHAIRMAN: In order to ensure that
21 we do not intervene here between client
22 confidentiality and things of that nature,
23 hopefully, we can carry on and maybe ask the
24 questions that are relevant to the presentation
25 made, please?
2165
1 MS. MATTHEWS LEMIEUX: I really
2 have -- I have no other questions, but before we
3 leave this, I do want to clarify, and you will see
4 in terms of the information I will provide, I have
5 never provided advice to Pimicikamak with respect
6 to any of the energy issues in Minnesota or
7 otherwise.
8 THE CHAIRMAN: Thank you. Other
9 questions? Mr. Bedford.
10 MR. BEDFORD: I understand from all
11 you have said this afternoon is that your place of
12 residence and the place where you do most of your
13 work is in the State of Minnesota?
14 MR. RUDNICKI: That's correct.
15 MR. BEDFORD: I know that you
16 undoubtedly already know this, but if you don't,
17 as a Minnesotan and given the kind of work you do
18 to make a living, I am sure you will be interested
19 to know Calpine (ph) Corporation has announced
20 today plans to build a 365-megawatt gas-fired
21 generator at Mankato, Minnesota. When I heard
22 that and I listened to your presentation, I
23 thought that it sounds like the new reality in
24 Minnesota is just like the old reality; would you
25 agree?
2166
1 MR. RUDNICKI: Well, I presented the
2 tip of the icerberg in terms of the new reality in
3 Minnesota and you can characterize however you
4 like. I think the facts can speak for themselves.
5 I provided access to web documents, hard copy
6 documents and I leave it to the commission to do
7 whatever they need to do to make a fully informed
8 decision.
9 MR. BEDFORD: One of the many
10 documents that these commissioners have had to
11 read is a report prepared by the Mid-continent
12 Area Power Pool, otherwise known as MAPP. It is a
13 draft report dated May 28th, 2003.
14 In preparing to come here today, did
15 you have an opportunity to read that report?
16 MR. RUDNICKI: I am not familiar with
17 that specific report.
18 MR. BEDFORD: I assume in your work,
19 however, you are familiar with MAPP?
20 MR. RUDNICKI: I am familiar with
21 MAPP, I am familiar with MISO and I am familiar
22 with the fact that, again, you are talking about a
23 business as usual scenario.
24 What is significant, again, for this
25 commission to know, is that National Wind Energy
2167
1 Coordinating Commission is aggressively working
2 with lignite, coal and wind energy producers to
3 figure out how to deal with transmission issues.
4 That is a rather significant development that I am
5 sure MAPP is not necessarily promoting at this
6 point.
7 MR. BEDFORD: Not a surprise to you
8 then that MAPP's 2003 forecast as presented in
9 this report suggests that for summer 2011, there
10 is a prediction that Excel Energy will have to
11 import in excess of 2000 megawatts of energy from
12 some place?
13 MR. RUDNICKI: I am not familiar with
14 it.
15 MR. BEDFORD: Are you perhaps familiar
16 with the fact that the United States Federal
17 Department Of Energy in its 2004 Outlook has
18 stated that renewable technologies, by which it
19 means wind and biomass, will account for just over
20 5 percent of expected capacity expansion by the
21 year 2025?
22 MR. RUDNICKI: Well, I might be
23 mistaken about this, but I believe that is the
24 basis for the justification need for an
25 alternative to documentation. In fact, project
2168
1 proponents rely extensively upon those very
2 precise documents. They are DOE and there are
3 some state documents.
4 That is the point I am trying to share
5 here. As long as one continues to go back to the
6 industry spokes people, under the business as
7 usual scenario, you will come up with an answer
8 that is reflective of the business as usual
9 scenario.
10 If you want to understand the
11 potential and implications of the Wuskwatim
12 project on this side of the border and that side
13 of the border, one needs to peel back the veneer
14 and see what the reality is. You keep citing to
15 me industry as usual and business as usual
16 scenario information. I am not here to judge the
17 information. I am only trying to convey to you
18 that there is more information. That's all I am
19 suggesting here. There is more information and
20 perhaps you want to find independent sources to
21 provide that information or to validate the
22 information. That's all I am saying. I am not
23 going to even try to get into the U.S. Department
24 of Energy documents and other material.
25 So, that is my only purpose in making
2169
1 my comments. There is more information, it is
2 there for the taking or the finding.
3 MR. BEDFORD: I have no further
4 questions.
5 THE CHAIRMAN: Any further questions?
6 Ms. Gaile Whelan-Enns to redirect.
7 MS. WHELAN ENNS: Thank you. Being
8 not a lawyer or economist or sociologist, I would
9 like to ask you some questions that go to
10 definitions and some of the things that go to your
11 presentation, if I may.
12 If one was fully internalizing
13 environmental and social costs for the Wuskwatim
14 projects, then would the project plan need to
15 fully internalize all of the costs on the
16 transmission lines also?
17 We have, again, been mostly talking
18 about the generation station. So, it is a
19 question about whether then one would be aiming to
20 internalize these external costs, environmental
21 and social, for both -- in relation to both the
22 generation station and these three segments of
23 transmission line?
24 MR. RUDNICKI: Well, I think that
25 would only be reasonable. Again, if we are
2170
1 looking for accurate economic signals or prudent
2 business decisions, that information would seem to
3 be necessary. It is part of the total project. A
4 generating plant, absent transmission lines
5 probably isn't going to be of use to anybody. So,
6 yes, that is part of the equation.
7 MS. WHELAN ENNS: Are externalities --
8 and we will stay with the Hydro development
9 project as the example we are dealing with here.
10 Are externalities fully valued and internalized in
11 the business as usual scenario?
12 MR. RUDNICKI: No. Again, I think
13 that is the problem. The business as usual
14 scenario fails to adequately account for the
15 social, environmental costs and lost opportunity
16 costs associated with developing new local
17 renewables.
18 MS. WHELAN ENNS: There are a variety
19 of shifts in public policy over the last 20 years
20 or so, which aim to arrive at standards that
21 combine societal or social environmental and
22 economic objectives, standards, including for
23 reviews. I was trying to figure out about
24 Manitoba's Sustainable Development Act while I was
25 listening to your presentation today, which is
2171
1 different than reading the words earlier.
2 Does achieving sustainability
3 objectives or sustainable development objectives
4 in public policy and legislation then point to
5 fully internalizing externalities? Would that be
6 a presumed requirement to reach sustainable
7 development or sustainability goals in a
8 jurisdiction or on a societal basis?
9 MR. RUDNICKI: Well, again, I think
10 that is only reasonable because absent -- it is
11 kind of like having an equation with some
12 variables in it. If you are missing some of the
13 variables, you don't get the full answer. So, it
14 would seem that is just required.
15 Sustainability is an interesting
16 question because we are challenged with meeting
17 our current needs, but also being cognizant of
18 generations yet to come. That's, once again, why
19 I believe under the alternative energy scenario,
20 there is incredible hope for the future. It is
21 recognizing resources approximate to the need. It
22 is finding a compatible balance for use of those
23 resources and the -- in this case, the generating
24 function.
25 But, by having a full cost accounting,
2172
1 by knowing kind of a wholistic picture, it begins
2 to force the internalization. Again, we could
3 find lots of off-the-shelf analyses of this
4 information and I think what we will find if we go
5 to those sources of information is that -- a more
6 complete cost accounting just makes for a better
7 decision ultimately in the energy resources that
8 are used. But, the externalities, I want to
9 remind everybody, extend to health problems for
10 kids, for adults, it extends to damage to the
11 environment and we are talking about past and
12 present harms.
13 MS. WHELAN ENNS: Currently -- again,
14 not speaking as an economist or expert --
15 currently, because we are in transition certainly
16 right through the western world in respect to
17 sustainable objectives and sustainability, is it
18 an accurate description to say that our current --
19 some of our current economic indicators including
20 and in relation to Hydro projects such as we are
21 discussing, actually show increases in GNP or GDP
22 without internalizing the societal costs that you
23 are describing, the externalities that you are
24 describing?
25 The classic way of asking that of
2173
1 course is was the Valdez good for the economy?
2 Was Chernobyl good for the economy? I am asking
3 these questions because of a concern on
4 definitions today. If -- I am seeing an objection
5 to that question, so I will turn the page.
6 I would like to ask a chronological
7 question in terms of the question and answer
8 regarding wind industry in Europe.
9 Is it correct that the wind industry
10 in Europe is 10 to 15 years ahead of the
11 start-ups, the first projects -- and we are about
12 to have our first wind project in Manitoba -- here
13 in North America. And the pattern that you were
14 describing in terms of the growth and these
15 targets in Germany, Denmark and so on, are a
16 function of about a 15-year time line?
17 MR. RUDNICKI: From what I have seen
18 in the literature, I think that is pretty
19 accurate. Again, there are number of -- a number
20 of -- what we have touched on, I think, in this
21 brief conversation, there have been a number of
22 disciplines that range from public policy to legal
23 issues to government affairs issues, generally,
24 and we could really get down to particulars with
25 that.
2174
1 Clearly, the Germans and the Danes
2 have pushed for years. They make no bones about
3 it in their initiatives. I think it is in
4 Germany, in particular, that there is clear
5 expression that our goal is to use renewables and
6 we want to meet -- in fact, 100 percent of our
7 electricity need with certain renewables, wind
8 comprising up to a third of that whole package.
9 As a result of that particular vision
10 being set forth, lots of policies follow from
11 that. So, it is an articulated -- it is a clearly
12 articulated vision about the future.
13 MS. WHELAN ENNS: I wanted to ask you
14 about time lines then in respect to the Chair's
15 question, regarding the clean up of the Hudson
16 River and Lake Erie.
17 Is it a reasonable understanding --
18 and I don't, other than presentations from Mr.
19 Kennedy, I am not knowledgeable about the Hudson
20 River. Is it a reasonable understanding that this
21 example -- it was a good one from the Chair -- is
22 an example of externalities not being valued,
23 being delayed, not being internalized in terms of
24 the combined impacts of development decisions,
25 where then it is basically all of us paying?
2175
1 MR. RUDNICKI: Again, I think that is
2 a perfect example of externalities. What happens
3 is that the ongoing and accumulating harms
4 associated with that burden that is pushed off on
5 to the environment continues to grow. As it
6 continues to grow, people suffer, environments
7 suffer.
8 MS. WHELAN ENNS: Is there a
9 possibility that the business as usual approach in
10 respect to the Wuskwatim projects may, in fact,
11 also delay both valuation and then costs and
12 payment on externalities for the Wuskwatim
13 projects?
14 MR. RUDNICKI: Could you give me that
15 one more time.
16 MS. WHELAN ENNS: Sorry, late in the
17 day for all of us, including me.
18 I am trying to basically ask you
19 whether the business as usual scenario for the
20 Wuskwatim projects then has the potential to -- if
21 mitigation and planning is not, you know, fully
22 right on the dot accurate, including in terms of
23 climate change, is it possible then that we could
24 have delayed costs on externalities from these
25 projects?
2176
1 MR. RUDNICKI: It sure seems like a
2 possibility and I think once again, looking at
3 some of the laws in the United States that deal
4 with the development of hydro, point out some of
5 the problems. There is limitations on development
6 and some of those limitations go to specifically
7 environmental issues. They go to cultural issues.
8 They go to a whole host of factors considered by
9 the Federal Energy Regulatory Commission.
10 MS. WHELAN ENNS: Thank you. One last
11 question, if I may.
12 Would you recommend that Manitoba have
13 a regulatory mechanism to register consultants and
14 lobbyists?
15 MR. RUDNICKI: Does that mean --
16 MS. WHELAN ENNS: I don't know the
17 procedures and don't understand them fully in
18 Minnesota, but would you recommend that we do that
19 here?
20 MR. RUDNICKI: Let's put it that
21 way --
22 THE CHAIRMAN: I don't know that that
23 response is pertinent to redirect.
24 MS. WHELAN ENNS: I accept that from
25 the Chair. Again, I was trying to speak to some
2177
1 of the content in the questions.
2 If I may take a small liberty,
3 Manitoba Wildland CNF is on the record in Manitoba
4 in the ministerial correspondence in several
5 departments recommending that we do this as of
6 about three years ago.
7 THE CHAIRMAN: All right.
8 MS. WHELAN ENNS: I am -- thank you.
9 THE CHAIRMAN: Thank you.
10 MR. GREWAR: Mr. Chairman, I just
11 wanted to point out, we neglected to enter as
12 exhibits Mr. Rudnicki's PowerPoint slide
13 presentation, which I would propose as CNF-1004
14 and CNF-1005 would be the actual submission,
15 "Manitoba Clean Environment Commission Hearing,
16 Proposed Wuskwatim Generation & Transmission
17 Project, Presentation by Timothy J. Rudnicki", as
18 CNF-1005.
19 THE CHAIRMAN: Thank you.
20
21 (EXHIBIT CNF-1004: Mr. Rudnicki's
22 PowerPoint slide presentation)
23
24 (EXHIBIT CNF-1005: Mr. Rudnicki's
25 typed submission re Proposed
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1 Wuskwatim Generation & Transmission
2 Project)
3
4 THE CHAIRMAN: Thank you, Mr.
5 Rudnicki.
6 MR. RUDNICKI: Thank you.
7 THE CHAIRMAN: With this, we will
8 adjourn for today and reconvene tomorrow at 1:00
9 o'clock. Thank you. This is now 5:21 p.m.
10
11 (ADJOURNED AT 5:21 P.M.)
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